Back in early October I said that NOK stock was a great investment, and that Nokia Corp (ADR) (NYSE:NOK) is a must own for the long haul. At the time, Nokia stock had been cut in half from where it traded in early 2015.
Since my first article, Nokia stock has fallen from $5.10 to $4.19. It most certainly seems I was wrong. However, NOK stock was a good investment then and it is an even better investment now.
That said, all of the reasons detailed in my October article still apply today. The Alcatel-Lucent SA (ADR) (NYSE:ALU) acquisition is great for NOK stock owners long-term, and will create shareholder value. Why?
Not only are there cross-selling opportunities galore that Nokia stock owners will realize in the coming year, but the combined companies will head and pave the way for many of the most exciting technologies that will push the wireless and wireline industries forward over the next decade.
A catalyst to drive NOK stock higher
I am referring to Nokia’s recent accomplishment with internet speeds of 1 Terabit per second (Tbps). These are speeds that Nokia Bell Labs previously claimed to have accomplished in a lab, but just recently accomplished in “real world” conditions.
Keep in mind that it was not five years ago that the standard for internet speeds was 10 megabits per second, or Mbps. Then, Google Fiber was born, and it boasted speeds of 1 gigabit per second, Gbps, or 1,000 times faster than the status quo. Nokia is producing speeds that are 1,000 times faster than Google Fiber.
To get an idea of these speeds, it would be equivalent to downloading the entire Harry Potter movie series in seconds. The speed is beyond human comprehension, yet Nokia achieved it. And perhaps most impressively, Nokia did so on regular fiber connections. This means that with the addition of Nokia equipment, service providers would not need any major infrastructure investments to deploy this technology.
All things considered, there are not too many consumers who need 1 Tbps download speeds at their home. However, 5G will be significantly faster than 4G, and also, one of the key elements to 5G is that it blurs the lines of wireline and wireless services. In theory, wires will be removed from the home with 5G, and all consumers will be on one high speed network.
While that sounds great, it also means more strain on networks. Not to mention, there are new industries that will be using those same networks like the Internet of Things and self-driving cars & connected cars among others. What Nokia has done is solidify its place at the epicenter of this new era of high speed, upgraded networks.
This is one of many reasons that investors should see Nokia stock as a great investment opportunity, and should overlook the recent losses in NOK stock.