How Nokia OYJ Stock Rose 10% Last Month
Shares of telecommunications infrastructure giant Nokia (NYSE: NOK) gained 9.9% in April of 2018, according to data from S&P Global Market Intelligence. Nokia's gains followed from the misfortunes of one of the company's largest rivals.
On April 16, the U.S. Department of Commerce imposed a seven-year export ban on Chinese telecom equipment company ZTE because it failed to stay within the boundaries of an earlier settlement. As a direct competitor to ZTE, Nokia stands to benefit from the Chinese company's lack of presence in the American market.
The other shoe dropped May 9, when ZTE said it had halted its main business operations because there was no way to go forward without access to American technologies and products. So Nokia gets to compete for ZTE's old infrastructure business while other phone makers pick up the pieces as a former leader in that space leaves the global market entirely.
Importantly, ZTE was a leading innovator and an expected market leader for 5G wireless base stations. Giving Nokia a bigger bite of that growth-packed pie may prove game changing in the long run. In short, April's big gains made perfect sense because ZTE's exit paved Nokia's way toward bigger and better prospects in the next few years.
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Anders Bylund has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.