Nokia Corporation (NOK - Free Report) recently announced that it has entered into an agreement with IT firm HCL Technologies to streamline and modernize its outsourced IT management services. The five-year deal entails HCL to integrate the services of four current vendors into a single IT services delivery and design framework with the help of a transformation roadmap.
How This Deal Will Benefit the Companies
With the synergistic partnership, Nokia expects to boost operational efficiencies and fulfil the previously set targets. HCL’s strong portfolio of best-in-industry next generation technology services will provide key transformational services such as cloud orchestration, digital platforms, Big Data analytics, cybersecurity, autonomics and modern collaborative workplaces. These services will enable it to better meet the growing needs of a rapidly changing customer base like Nokia. Lately, Nokia has been focusing on digital transformation initiatives by launching new-age products and solutions. The company believes that this deal is a strategic milestone in its transformation efforts, both in terms of increasing the efficiency of its IT operations as well as augmenting service delivery to customers.
The relationship between Nokia and HCL has long been documented with the latter providing global service desk and desktop management outsourcing services to the former since 2009.
Nokia boasts of state-of-art technology which enables it to transform the communications industry. These include smooth transition to 5G technology, ultra broadband access, IP and Software Defined Networking, cloud applications, Internet of Things, and the like. Nokia has launched new 5G services and successfully completed various 5G transmission tests in different locations this year.
Nokia’s continuous efforts and innovations look promising. In the past three months, the stock has outperformed the industry with an average return of 11% compared with 9.1% rise for the latter.
Zacks Rank and Stocks to Consider
Nokia currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry space are Comtech Telecommunications Corp. (CMTL - Free Report) , sporting a Zacks Rank #1 (Strong Buy) and Motorola Solutions, Inc. (MSI - Free Report) and Ubiquiti Networks, Inc. (UBNT - Free Report) , carrying Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Comtech has an expected long-term earnings growth rate of 5%.
Motorola has an expected long-term earnings growth rate of 8%.
Ubiquiti has an expected long-term earnings growth rate of 18.6%.
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