Morgan Stanley expects an area of tech to boom into a $5 trillion opportunity and names 3 stock picks
Investment bank Morgan Stanley has pinpointed an area of the tech sector expected to explode into a whopping $5 trillion opportunity. The firm’s analysts believe that this area, known as network transformation, could revolutionize the sector.
According to the bank, the shift toward 5G technology is a key driver for the growth of network transformation. Companies will have to upgrade their networks and invest in the technology required to accommodate the increased data speeds and lower latency offered by 5G. Morgan Stanley argues that the industry could experience a tenfold increase in spending on network transformation over the next ten years, from $500 billion in 2020 to $5 trillion in 2030.
The report highlights three technology stocks in particular that it recommends investors consider taking a closer look at, all of which are beneficiaries of network transformation. These picks are as follows:
1) Cisco Systems (CSCO)
Cisco Systems is a leading networking and tech company that provides products and services to businesses of all sizes. The report notes that Cisco’s position as a top vendor for network equipment and services puts it in an ideal position to benefit from growing investment in network transformation.
2) Apple Inc. (AAPL)
Apple, a global technology giant that needs no introduction, is another stock that the report identifies as a major player in the network transformation space. One of the key factors behind this is the fact that Apple is one of the biggest adopters of 5G technology, with the firm making investments in the development of its own 5G modem.
3) Corning Inc. (GLW)
Corning is a materials science company that specializes in glass, ceramics, and optical communications. The report notes that the firm’s optical communications division is a major player in the fiber optic market, which is expected to see significant growth as a result of network transformation.
The report also highlights several other companies that stand to benefit from the growing investment in network transformation. These include infrastructure and server equipment providers such as Hewlett Packard Enterprise (HPE) and Dell Technologies (DELL), as well as semiconductor manufacturers such as Intel (INTC) and Qualcomm (QCOM).
In summary, Morgan Stanley’s report suggests that network transformation will play a crucial role in shaping the future of the tech sector. The bank argues that companies that are able to capitalize on this growing trend will stand to benefit greatly, and investors should take note. The stocks it highlights – Cisco, Apple, and Corning – may be worth considering for those looking to cash in on this $5 trillion opportunity.