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ERIC vs. NOK: Which 5G Infrastructure Stock is the Better Buy Now?
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Key Takeaways
Nokia appears better positioned than Ericsson, with stronger 2026 growth prospects and stock performance.
NOK's 2026 sales and EPS are projected to rise 5% and 18.2%.
Nokia shares gained 29.3% in a year versus Ericsson's 9.1%, but trade at a higher forward price/sales ratio.
Ericsson (ERIC - Free Report) and Nokia Corporation (NOK - Free Report) are key players in the telecommunications infrastructure market, particularly 5G networks, radio access equipment and emerging AI-powered network technologies. Ericsson is well-positioned to capitalize on the market momentum with a competitive 5G product portfolio. With a holistic growth focus, the company strives to be the leading telecommunications infrastructure provider worldwide and establish a focused enterprise business.
Nokia is a premier telecommunications equipment provider, supporting businesses’ digital transformation at the network edge through both 5G connectivity and cloud-native applications and capabilities. It has been developing its 5G portfolio, strengthening AirScale and advancing the capabilities of its ReefShark chipset. Nokia’s extensive portfolio consists of around 20,000 patents, among which 7,000 are essential for 5G.
With domain-specific expertise in core areas, both Ericsson and Nokia are well-positioned to cater to the evolving network connectivity demands of business enterprises. Let us delve a little deeper into the companies’ competitive dynamics to understand which of the two is relatively better placed in the industry.
The Case for ERIC
Ericsson is focusing on 5G system development and has undertaken many notable endeavors to position itself for market leadership in 5G. It currently has 206 live 5G networks across the globe, spanning 85 countries. The company believes that the standardization of 5G is the cornerstone for digitizing industries and broadband. The deployment of 5G networks is likely to boost the adoption of IoT (Internet of Things) devices, with technologies like network slicing gaining more prominence.
Ericsson continues to invest in the Enterprise business to make it a sizeable part of its business. The company has introduced on-demand network slicing capability in Android 14 devices. It empowers developers to enhance the flexibility of applications and allows service providers to better align network connectivity with user-specific requirements. Ericsson continues to prioritize the terms and value of new agreements and renewals. Management also identifies opportunities to increase smartphone market penetration and extend licensing into additional segments.
However, rising component costs represent a continuing challenge for Ericsson's profitability and pricing competitiveness. Management expects the global radio access network market to remain flat in 2026, constraining opportunities for broad-based industry expansion. Management has identified component cost increases as a margin headwind for 2027. Ericsson is pursuing pricing actions, portfolio optimization and operational efficiencies to mitigate these costs. The ability to offset inflation remains important in a flat network equipment market, where opportunities to recover higher expenses through volume growth may be limited.
The Case for NOK
Nokia facilitates its customers to move away from an economy-of-scale network operating model to demand-driven operations by offering easy programmability and flexible automation needed to support dynamic operations, reduce complexity and improve efficiency. The company seeks to expand its business into targeted, high-growth and high-margin vertical markets to address growth opportunities beyond its traditional primary markets.
Its installed base of high-capacity AirScale products, which enables customers to quickly upgrade to 5G, is growing fast. The company is driving the transition of global enterprises into smart virtual networks by creating a single network for all services, converging mobile and fixed broadband, IP routing and optical networks with the software and services to manage them. Leveraging state-of-the-art technology, Nokia is transforming the way people and things communicate and connect. These include a seamless transition to 5G technology, ultra-broadband access, IP and Software Defined Networking, cloud applications and the Internet of Things.
Nokia is reportedly the only global supplier offering Open Radio Access Network (O-RAN) with commercial 5G Cloud-RAN networks. The company intends to accelerate strategy execution, sharpen customer focus and reduce long-term costs. At the same time, it is focused on building a strong, scalable software business and expanding it to structurally attractive enterprise adjacencies. Nokia’s C-Band portfolio supports 5G standalone and non-standalone networks, cloud-based implementations and O-RAN products.
However, Nokia remains exposed to the cyclical nature of telecommunications infrastructure spending, which can create uneven revenue and profitability across investment cycles. While AI and cloud demand is supporting Optical Networks and IP Networks, carrier spending remains mixed across regions and business lines. Although the company continues to strengthen its AI-native networking portfolio and expand relationships with hyperscale cloud providers, competitors are pursuing similar opportunities across 5G, AI infrastructure and future 6G deployments. Maintaining technology leadership while preserving pricing discipline remains essential as customers balance network modernization against capital spending constraints.
How Do Zacks Estimates Compare for ERIC & NOK?
The Zacks Consensus Estimate for Ericsson’s 2026 sales implies a year-over-year decline of 1.6%, while that for EPS indicates a fall of 5.9%. EPS estimates have trended up 4.9% on average over the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Nokia’s 2026 sales suggests year-over-year growth of 5%, while that for EPS implies a rise of 18.2%. The EPS estimates have remained static over the past 60 days.
Image Source: Zacks Investment Research
Price Performance & Valuation of ERIC & NOK
Over the past year, Ericsson has surged 9.1% against the industry’s fall of 0.6%. Nokia has gained 29.3% over the same period.
Image Source: Zacks Investment Research
Nokia looks more expensive compared to Ericsson from a valuation standpoint. Going by the price/sales ratio, Ericsson’s shares currently trade at 1.59 forward sales, lower than 2.1 for Nokia.
Nokia expects sales and earnings to improve in 2026, unlike Ericsson. In terms of price performance, Nokia has outperformed Ericsson, although it is trading relatively more expensively compared with the latter. Although there is not much to choose from, Nokia appears to be slightly better placed than Ericsson at the moment and is therefore a better investment option now.
View the Zacks #1 Rank List
Image: Bigstock
ERIC vs. NOK: Which 5G Infrastructure Stock is the Better Buy Now?
Key Takeaways
Ericsson (ERIC - Free Report) and Nokia Corporation (NOK - Free Report) are key players in the telecommunications infrastructure market, particularly 5G networks, radio access equipment and emerging AI-powered network technologies. Ericsson is well-positioned to capitalize on the market momentum with a competitive 5G product portfolio. With a holistic growth focus, the company strives to be the leading telecommunications infrastructure provider worldwide and establish a focused enterprise business.
Nokia is a premier telecommunications equipment provider, supporting businesses’ digital transformation at the network edge through both 5G connectivity and cloud-native applications and capabilities. It has been developing its 5G portfolio, strengthening AirScale and advancing the capabilities of its ReefShark chipset. Nokia’s extensive portfolio consists of around 20,000 patents, among which 7,000 are essential for 5G.
With domain-specific expertise in core areas, both Ericsson and Nokia are well-positioned to cater to the evolving network connectivity demands of business enterprises. Let us delve a little deeper into the companies’ competitive dynamics to understand which of the two is relatively better placed in the industry.
The Case for ERIC
Ericsson is focusing on 5G system development and has undertaken many notable endeavors to position itself for market leadership in 5G. It currently has 206 live 5G networks across the globe, spanning 85 countries. The company believes that the standardization of 5G is the cornerstone for digitizing industries and broadband. The deployment of 5G networks is likely to boost the adoption of IoT (Internet of Things) devices, with technologies like network slicing gaining more prominence.
Ericsson continues to invest in the Enterprise business to make it a sizeable part of its business. The company has introduced on-demand network slicing capability in Android 14 devices. It empowers developers to enhance the flexibility of applications and allows service providers to better align network connectivity with user-specific requirements. Ericsson continues to prioritize the terms and value of new agreements and renewals. Management also identifies opportunities to increase smartphone market penetration and extend licensing into additional segments.
However, rising component costs represent a continuing challenge for Ericsson's profitability and pricing competitiveness. Management expects the global radio access network market to remain flat in 2026, constraining opportunities for broad-based industry expansion. Management has identified component cost increases as a margin headwind for 2027. Ericsson is pursuing pricing actions, portfolio optimization and operational efficiencies to mitigate these costs. The ability to offset inflation remains important in a flat network equipment market, where opportunities to recover higher expenses through volume growth may be limited.
The Case for NOK
Nokia facilitates its customers to move away from an economy-of-scale network operating model to demand-driven operations by offering easy programmability and flexible automation needed to support dynamic operations, reduce complexity and improve efficiency. The company seeks to expand its business into targeted, high-growth and high-margin vertical markets to address growth opportunities beyond its traditional primary markets.
Its installed base of high-capacity AirScale products, which enables customers to quickly upgrade to 5G, is growing fast. The company is driving the transition of global enterprises into smart virtual networks by creating a single network for all services, converging mobile and fixed broadband, IP routing and optical networks with the software and services to manage them. Leveraging state-of-the-art technology, Nokia is transforming the way people and things communicate and connect. These include a seamless transition to 5G technology, ultra-broadband access, IP and Software Defined Networking, cloud applications and the Internet of Things.
Nokia is reportedly the only global supplier offering Open Radio Access Network (O-RAN) with commercial 5G Cloud-RAN networks. The company intends to accelerate strategy execution, sharpen customer focus and reduce long-term costs. At the same time, it is focused on building a strong, scalable software business and expanding it to structurally attractive enterprise adjacencies. Nokia’s C-Band portfolio supports 5G standalone and non-standalone networks, cloud-based implementations and O-RAN products.
However, Nokia remains exposed to the cyclical nature of telecommunications infrastructure spending, which can create uneven revenue and profitability across investment cycles. While AI and cloud demand is supporting Optical Networks and IP Networks, carrier spending remains mixed across regions and business lines. Although the company continues to strengthen its AI-native networking portfolio and expand relationships with hyperscale cloud providers, competitors are pursuing similar opportunities across 5G, AI infrastructure and future 6G deployments. Maintaining technology leadership while preserving pricing discipline remains essential as customers balance network modernization against capital spending constraints.
How Do Zacks Estimates Compare for ERIC & NOK?
The Zacks Consensus Estimate for Ericsson’s 2026 sales implies a year-over-year decline of 1.6%, while that for EPS indicates a fall of 5.9%. EPS estimates have trended up 4.9% on average over the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Nokia’s 2026 sales suggests year-over-year growth of 5%, while that for EPS implies a rise of 18.2%. The EPS estimates have remained static over the past 60 days.
Image Source: Zacks Investment Research
Price Performance & Valuation of ERIC & NOK
Over the past year, Ericsson has surged 9.1% against the industry’s fall of 0.6%. Nokia has gained 29.3% over the same period.
Image Source: Zacks Investment Research
Nokia looks more expensive compared to Ericsson from a valuation standpoint. Going by the price/sales ratio, Ericsson’s shares currently trade at 1.59 forward sales, lower than 2.1 for Nokia.
Image Source: Zacks Investment Research
ERIC or NOK: Which is the Better Pick?
Both Ericsson and Nokia carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Nokia expects sales and earnings to improve in 2026, unlike Ericsson. In terms of price performance, Nokia has outperformed Ericsson, although it is trading relatively more expensively compared with the latter. Although there is not much to choose from, Nokia appears to be slightly better placed than Ericsson at the moment and is therefore a better investment option now.