Ericsson ERIC recently inked recently inked a Memorandum of Understanding (MoU) with CelcomDigi Berhad to enhance and expand the latter’s autonomous network operations in Malaysia. With this collaboration, the largest mobile operator in Malaysia aims to deliver superior user experiences across its extensive network infrastructure, leveraging Ericsson’s AI-driven network analytics.

With the rising consumer expectations and the growing complexity of mass 5G adoption, communication service providers are becoming more aware of the requirement for intent-based autonomous operations. In today's digital landscape access to high-quality uninterrupted network service is paramount for supporting data intensive applications such as multiplayer gaming, streaming and IoT devices. Hence it is necessary for telecommunication companies like CelcomDigi to focus on delivering superior services that meet the growing demands of its users. Ericsson’s next-generation network operating models address these issues by streamlining the network management process, enabling self-optimization driven by intent and hyper-automation. 

The collaboration will see Ericsson deploy its state-of-the-art industry-leading Intent-Based Operations (IBO) to accelerate the development of autonomous network operations in the country. The objective of these systems is to efficiently manage the complexities and variations of services, particularly within the dynamic 5G environment. By leveraging AI/Machine learning technologies, these systems specify the desired outcome or action that an operator wants the network to achieve and then interpret this goal and manage the network to fulfill it. These automation capabilities of IBOs will likely allow CelcomDigi’s networks to adapt to changing demands and conditions in real-time, providing a more responsive and modern infrastructure for telecommunications.

Increasing Client Base to Drive ERIC’s Performance

With the emergence of the smartphone market and subsequent usage of mobile broadband, user demand for coverage speed and quality has increased recently. Ericsson is focusing on 5G system development and has undertaken many notable endeavors to position itself for market leadership on 5G. The company’s innovative solutions are reshaping connectivity across sectors, from enhancing network visibility through advanced 5G deployments to revolutionizing industries with robust IoT innovations.

Commanding a strong presence in more than 180 countries, Ericsson is expected to benefit from the increasing customer base. This will likely enable the company to generate higher revenues in the upcoming quarters. An improved financial performance is likely to propel the stock upward.

Ericsson has been witnessing declining demand trends in the South East Asia region for the past few quarters. The recent agreement with Malaysia’s largest mobile operator will likely strengthen ERIC's presence and boost commercial prospects in the region.

ERIC Stock Price Performance

Shares of Ericsson have gained 33.2% over the past year compared with the industry’s growth of 30.2%.

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ERIC’s Zacks Rank and Stocks to Consider

Ericsson currently carries a Zacks Rank #4 (Sell).
 
Some better-ranked stocks in the broader industry have been discussed below:

InterDigital IDCC sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the trailing four quarters, InterDigital delivered an earnings surprise of 158.41%. The company is a pioneer in advanced mobile technologies that enable wireless communications and capabilities.

InterDigital designs and develops a wide range of advanced technology solutions, which are used in digital cellular, wireless 3G, 4G and IEEE 802-related products and networks. 

CommScope Holding COMM currently sports a Zacks Rank #1. It has a long-term growth expectation of 19.37%. 

Headquartered in Hickory, NC, CommScope is a premier provider of infrastructure solutions, including wireless and fiber optic solutions, for the core, access and edge layers of communication networks. Since its inception in 1976, the company has created a niche market for itself, helping customers scale network capacity, delivering better network response time and performance, and simplifying technology migration. CommScope currently operates in three segments — Connectivity and Cable Solutions, Networking, Intelligent Cellular and Security Solutions and Access Network Solutions. 

Arista Networks, Inc. ANET, carrying a Zacks Rank of 2 (Buy) at present, supplies products to a prestigious set of customers, including Fortune 500 global companies in markets such as cloud titans, enterprises, financials and specialty cloud service providers.

Arista delivered a trailing four-quarter average earnings surprise of 12.87% and has a long-term growth expectation of 14.41%. Arista currently serves five verticals, namely – cloud titans (customers that deploy more than one million servers), cloud specialty providers, service providers, financial services and the rest of the enterprise.

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