Telecom Stock Roundup: Qualcomm Boosts Self-Driving, Ericsson's IoT Drive & More
Zacks Investment Research | Jan 08, 2020 08:57PM ET
In the past five trading days, telecom stocks trended down as geopolitical tensions rattled the market and threatened to spoil the initial euphoria associated with the likely signing of the “Phase One” trade deal between the United States and China. With oil prices expected to remain highly volatile until the Middle East conflicts deescalate, the industry is poised to face sterner tests as the year gradually progresses. In addition, heightened cybersecurity threats have created a feeling of mistrust and fueled uncertainty within the rank and files of the sector.
A Chinese trade delegation led by Vice Premier Liu He is slated to touch the American shores next week for the formal inking of the partial trade accord. This follows the recent report that revealed that U.S. trade deficit has fallen to a three-year low, largely due to higher exports and lower import basket, primarily led by a decline of imports from China. Thanks to the “Phase One” deal, the trade deficit is likely to dip further as China has reportedly pledged to purchase $200 billion of goods over the next two years, including $40-$50 billion of agricultural products each year.
Just when it seemed that the worst is almost over for the beleaguered industry, a fresh turmoil in the Middle East erupted with the Trump administration assassinating a top Iranian general through drone attacks, and Iran retaliating with missile attacks at U.S. airbases in Iraq. Although both countries have stepped back from the brink of a war, a shadow warfare and proxy wars could take centerstage as cybersecurity threat intensifies. Iran has historically launched several potent cyberattacks, breaching United States’ cyber defenses and potentially harming finance, telecom and energy sectors. Despite significant technological advances, several smaller U.S. firms are still vulnerable to such attacks, risking the safety and security of sensitive data. This, in turn, has created an element of insecurity within the industry, triggering a downtrend.
In order to avert potential cyber aggression with increased 5G deployment, the House of Representatives passed three bipartisan 5G security bills in the past week that had advanced through the Committee last year. These include the Secure 5G and Beyond Act, which entails the administration to create an “unclassified national strategy” to protect consumers and allies from potential threats to 5G systems, thereby protecting the “competitiveness” of U.S. firms. Two other bipartisan bills – the Promoting United States International Leadership in 5G Act and Promoting United States Wireless Leadership Act – would require the administration to become more involved in international standard-setting bodies around wireless networks. This is likely to encourage participation by U.S. firms and other stakeholders in developing standards for 5G networks and future generations of communications networks.
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Meanwhile, a U.S. lawmaker has introduced a bill to prevent sharing of key intelligence with countries that allow Chinese telecommunication equipment manufacturer Huawei to operate 5G network technology within their borders. The strategic move is the latest ploy by the United States to thwart the growing emergence of Huawei as 5G deployment picks up pace across the globe.
Regarding company-specific news, autonomous driving solutions, digitization, customer growth statistics and guidance update took the center stage over the past five trading days.
Recap of the Week’s Most Important Stories
1. Qualcomm Incorporated (NASDAQ:QCOM) has unveiled the first-of-its-kind automotive platform — Snapdragon Ride — which enables automakers to transform their vehicles into self-driving cars using AI.
Snapdragon’s scalable platform comprises the Snapdragon Ride Safety system-on-a-chip, Accelerator and the Snapdragon Ride Autonomous Stack. The combination of these self-driving algorithms facilitates a robust architecture of hardware and software that supports advanced driver assistance systems like automatic emergency braking, traffic sign recognition, lane keeping, self-parking and automated highway driving technology (Read more: Original post
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