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Ericsson (ERIC), Dell Team Up to Boost Network Transformation

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Ericsson (ERIC - Free Report) recently announced that it has joined forces with Dell Technologies to assist communication service providers (CSPs) in their transition to cloud-based network infrastructure. The collaboration aims to utilize their extensive industry expertise to develop customized plans to enable CSPs to modernize their network architectures and operating models. A major goal is to jointly develop services that simplify the deployment process, including factory validation, installation and ongoing operational management.

Ericsson and Dell will focus on developing energy efficient solutions, ensuring scalable and cost-effective network management. This will foster innovation, providing CSPs with more growth opportunities.

Per the deal, Ericsson will commercially launch its Cloud RAN software on Dell PowerEdge servers. The solution will offer continuous integration testing and lifecycle management, empowering CSPs to deploy advanced technologies swiftly while mitigating risks.

Network operators are increasingly leaning towards cloud-based network infrastructure, owing to the potential for better monetization and reduced operating costs. Despite recognizing the critical importance, several challenges undermine their initiatives. Limited time and budget, along with concerns over maintaining network reliability and security during the transition, are major issues.

With its strategic partnership with Dell, Ericsson will provide the necessary expertise to overcome these barriers, accelerating network modernization and introducing advanced cloud-native programmable networks to match customer expectations in a rapidly evolving market. These initiatives will strengthen Ericsson position in the wireless equipment industry and improve its commercial prospects.

With the emergence of the smartphone market and the subsequent usage of mobile broadband, user demand for coverage speed and quality has increased exponentially. Further, to maintain performance with increased traffic, there is a continuous need for network tuning and optimization. Ericsson is much in demand among operators to expand network coverage and upgrade networks for higher speed and capacity. The company is reportedly the world’s largest supplier of LTE technology with a significant market share and has established a large number of LTE networks worldwide.

The company focuses on 5G system development and has undertaken many notable endeavors to position itself as a market leader. It believes that the standardization of 5G is the cornerstone for digitizing industries and broadband. Ericsson expects mainstream 4G offerings to give way to 5G technology in the future. It currently has 162 live 5G networks across the globe, spanning 69 countries.

The stock has gained 14.2% over the past year compared with the industry’s growth of 51.3%.

Zacks Investment Research
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Zacks Rank & Stocks to Consider

Ericsson currently carries a Zacks Rank #3 (Hold).

NVIDIA Corporation (NVDA - Free Report) , sporting a Zacks Rank #1 (Strong Buy) at present, delivered a trailing four-quarter earnings surprise of 18.43%, on average. In the last reported quarter, it delivered an earnings surprise of 11.48%. You can see the complete list of today’s Zacks #1 Rank stocks here.

NVIDIA is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit. Over the years, the company’s focus evolved from PC graphics to AI-based solutions that support high-performance computing, gaming and virtual reality platforms.

Arista Networks, Inc. (ANET - Free Report) , sporting a Zacks Rank #1 at present, is likely to benefit from strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experience. Arista has a long-term earnings growth expectation of 15.68% and delivered an earnings surprise of 15.39%, on average, in the trailing four quarters.

It holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed datacenter segment. Arista is increasingly gaining market traction in 200 and 400-gig high-performance switching products and remains well-positioned for healthy growth in data-driven cloud networking business with proactive platforms and predictive operations.

Silicon Motion Technology Corporation (SIMO - Free Report) , sporting a Zacks Rank #1 at present, delivered a trailing four-quarter average earnings surprise of 4.72%.

It is a leading developer of microcontroller ICs for NAND flash storage devices. The semiconductor company also designs, develops and markets high-performance, low-power semiconductor solutions for original equipment manufacturers and other customers.

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