It's a big year for the telecommunications sector, even as the group plays bridesmaid to everyone's favorite artificial intelligence (AI) stocks. But we're witnessing a seismic shift in the telecom industry, with some jaw-dropping numbers to back it up. According to recent data from the GSMA, global mobile operators are set to invest over $1.5 trillion in their networks through the end of this decade. That's trillion with a 'T'! A big chunk of that cash is earmarked for 5G, which tells you just how serious these companies are about building out their networks for next-gen compatibility.
In another big development for the domestic telecom sector, Goldman Sachs (GS) just started coverage on the group with a bullish rating. Analyst James Schneider, Ph.D., noted that the U.S. telecom industry is entering a period where both competition and capital intensity are moderating simultaneously for the first time in a decade. In Goldman's view, this favorable backdrop should drive healthier growth and margin dynamics, with the potential for significant capital returns and stock re-rating across the sector.
