On January 7, S&P Global shared its 2026 outlook for the Telecom sector, which it believes will witness a higher level of M&A activity during the year. However, there will be risks involved for businesses that would take an inorganic route to expand their footprint. The firm noted that such an acquisitive strategy will drive up the broader segment capital expenditures, following moderate spending during the last 2 years.
Across the U.S., this industry will experience several notable trends. These include convergence of mobile and broadband, uptick in spectrum holdings by U.S. telcos, acceleration of fiber builds, and a higher level of device upgrades.
If we take a global view, the European market is also preparing itself for M&A related tailwinds, heading into 2026. This was highlighted by Jan Frederik Slijkerman, Senior TMT Strategist at ING, in the firm’s 2026 outlook shared on January 26. Slijkerman noted that the region is well-positioned for its digital decade to begin, as 80% of homes are expected to have fiber connectivity in 2026.
Having spoken about the telecom sector, it is pertinent to turn attention towards communication equipment businesses that play a critical role within the overall telecom infrastructure. These companies act as key enablers of a digital economy. Their reliance on a subscription-based recurring revenue model makes them highly attractive to investors. The segment is currently experiencing data center expansion, AI-led transformations, and fiber optic adoption.
With that background, let’s explore our 11 Best Communication Equipment Stocks According to Hedge Funds.
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Our Methodology
To identify stocks for this article, we screened U.S.-listed communication equipment companies with market capitalizations above $2 billion and share prices above $5. Next, we identified the number of hedge funds holding positions in these stocks as of the end of the third quarter of 2025. Finally, we selected 11 stocks with the highest number of hedge funds holding stakes and ranked them in ascending order.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
11. Ondas Incorporated (NASDAQ:ONDS)
Number of Hedge Fund Holders: 20
Ondas Incorporated (NASDAQ:ONDS) is one of the 11 best communication equipment stocks according to hedge funds.
On January 21, Stifel analyst Jonathan Siegmann raised the price target for Ondas Incorporated (NASDAQ:ONDS) from $17 to $18. The analyst maintains a Buy rating on the stock after management’s recent virtual investor day presentation. The company shed light on its Autonomous Systems portfolio and recent acquisitions. Regarding management’s outlook, Siegmann stated:
“Forecasts were nicely above our estimates and we gained greater appreciation of their differentiated approach to the military drone space.”
On February 2, Ondas Incorporated (NASDAQ:ONDS) made an important announcement for the expansion of its defense technology footprint through the acquisition of Rotron Aero. It is a UK-based developer of advanced unmanned and autonomous aerial platforms. This transaction is aimed at expanding the company’s capabilities in long-range and scalable military drone systems. The deal will be funded through a mix of cash and stock, and remains subject to regulatory approval. It is expected to help the company fulfill the growing demand for cost-effective autonomous technologies in the modern battlefield.
Ondas Incorporated (NASDAQ:ONDS) develops and sells private wireless networks, autonomous drones, and automated data solutions and platforms through its two segments, i.e., Ondas Networks and Ondas Autonomous Systems. Its offerings include FullMAX, FullMAX SDR, Optimus, Insightful, and Raider, which have mission-critical applications.
