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.
10. Viavi Solutions (NASDAQ:VIAV)
Number of Hedge Fund Holders: 28
Viavi Solutions (NASDAQ:VIAV) is one of the 11 best communication equipment stocks according to hedge funds.
On January 29, the price target on Viavi Solutions (NASDAQ:VIAV) was increased from $22 to $26 by B. Riley analyst Dave Kang. He maintained a Buy rating on the stock after the recent quarterly report that beat consensus estimates.
The analyst also reflected on the company’s recent acquisition of Spirent H-S Testing business, which makes it a leading player within the high-speed Ethernet validation space. This transaction also enables expansion of the company’s total addressable market at a time when the industry is making a shift towards complex and lower-latency architectures.
On January 29, Ryan Koontz from Needham also raised his price target for Viavi Solutions (NASDAQ:VIAV) from $24 to $28, maintaining a Buy rating. Koontz based his rating on the company’s strong quarterly earnings, along with favorable management guidance. He appreciates management’s cost-cutting intent with measures that are expected to generate annual savings worth around $30 million. The analyst expects data centers to grow by almost 20%, while other segments are projected to deliver 3%-5% growth.
Viavi Solutions (NASDAQ: VIAV) is a technology company that offers network testing, monitoring, and assurance solutions, as well as light-management technologies. The company serves various markets, including telecommunications, cloud, first responders, military, aerospace, and critical infrastructures. It delivers 5G, fiber, and 3D sensing solutions through two segments, i.e., Network and Service Enablement (NSE) and Optical Security and Performance Products (OSP).
9. Nokia Oyj (NYSE:NOK)
Number of Hedge Fund Holders: 31
Nokia Oyj (NYSE:NOK) is one of the 11 best communication equipment stocks according to hedge funds.
As of February 9 closing, consensus sentiment for Nokia Oyj (NYSE:NOK) remained moderately bullish. The stock had been covered by 7 analysts, receiving 5 Buy ratings and 1 Hold rating. With 1 Sell call, the stock has a projected median 1-year price target of $7.18.
On February 10, Nokia Oyj (NYSE:NOK) announced the transfer of 2,622,652 shares to participants in its equity-based incentive plans. This transfer relates to the board’s resolution to settle commitments related to the incentive plan, as previously announced on October 2, 2025. Following this, the company now holds 139,291,855 of its shares.
On February 2, Sandeep Deshpande of J.P. Morgan reiterated his Overweight rating on Nokia Oyj (NYSE:NOK). In the process, the analyst also raised the price target on the stock from $8 to $8.20, which leads to an upside potential of 16% at the current level.
Nokia Oyj (NYSE:NOK) is a Finland-based B2B technology innovation company that delivers mobile, fixed, and cloud network solutions. It operates through two primary segments, i.e., Network Infrastructure and Mobile Networks, focusing on network infrastructure, AI-powered connectivity, and technology licensing services. The company delivers a mix of optical, IP, fixed networks, radio, and core networking solutions.
8. Viasat Incorporated (NASDAQ:VSAT)
Number of Hedge Fund Holders: 31
Viasat Incorporated (NASDAQ:VSAT) is one of the 11 best communication equipment stocks according to hedge funds.
As of February 9 closing, consensus sentiment for Viasat Incorporated (NASDAQ:VSAT) was strongly bullish. The stock had been covered by 5 analysts, receiving 4 Buy ratings and 1 Hold rating. With no Sell call, the stock has a projected median 1-year price target of $48.50, leading to an upside potential of around 8%.
On February 6, Viasat Incorporated (NASDAQ:VSAT) reported revenue of $1.16 billion during the third quarter, which was slightly below the consensus estimates of $1.17 billion. The company posted a net income of $25 million compared to a $158 million loss in the prior year. This improvement was largely driven by higher interest income related to deferred Ligado payments received as part of a lump-sum settlement.
Following the third quarter results, Edison Yu from Deutsche Bank upgraded his rating on Viasat Incorporated (NASDAQ:VSAT) from Hold to Buy on February 6. The analyst also raised the price target from $36 to $48, yielding above 15% upside potential from the current level.
Viasat Incorporated (NASDAQ:VSAT) is a global broadband and communication service provider that delivers satellite-based broadband services, narrowband communications, secure networking systems, and cybersecurity solutions. The business is structured around two segments, i.e., Communication Services and Defense & Advanced Technologies. The company also develops wireless products, terminals, and space system solutions.
7. Calix Incorporated (NYSE:CALX)
Number of Hedge Fund Holders: 31
Calix Incorporated (NYSE:CALX) is one of the 11 best communication equipment stocks according to hedge funds.
On January 30, the price target for Calix Incorporated (NYSE:CALX) was lowered by Rosenblatt analyst Mike Genovese from $85 to $70. The analyst maintained his Buy rating on the stock, highlighting the recent dip in share price following a smaller-than-usual earnings beat as a buying opportunity. The firm is optimistic about a strong 2026, driven by upcoming catalysts that could support stronger performance. Genovese’s revision still leads to a potential upside of around 32%.
On January 21, Christian Schwab at Craig-Hallum lowered the price target on Calix Incorporated (NYSE:CALX) from $75 to $60. The analyst maintained his Buy rating on the stock after strong fourth-quarter results and a revised outlook for Q1 and FY26.
Schwab reflected on the company’s massive multi-year BEAD opportunity, which would enable management to achieve mid-teen topline growth in 2026. His revised price target still yields a double-digit upside of nearly 13%.
Calix Incorporated (NYSE:CALX) is a technology company that delivers cloud and appliance-based software platforms and managed services. It serves broadband service providers around the globe. Its Calix Cloud platform includes Engagement Cloud, Operations Cloud, and Service Cloud solutions. The company’s managed services portfolio comprises SmartHome, SmartTown, and SmartBiz managed services.
6. Extreme Networks (NASDAQ:EXTR)
Number of Hedge Fund Holders: 38
Extreme Networks (NASDAQ:EXTR) is one of the 11 best communication equipment stocks according to hedge funds.
On January 29, the price target on Extreme Networks (NASDAQ:EXTR) was reduced from $21 to $17 by UBS analyst David Vogt. The analyst reaffirmed his Neutral rating on the stock based on UBS’s stance to stay on the sidelines. This stance is based on the company’s mixed quarter two results.
On January 28, Ryan Koontz from Needham reduced his target price for Extreme Networks (NASDAQ:EXTR) from $24 to $21. The analyst reaffirmed a Buy rating on the stock, which still offers a revised upside potential of almost 38%.
Koontz has attributed his rating to the company’s impressive second-quarter results, posting revenue and EPS that exceeded consensus forecasts. He also noted an upward revision in revenue guidance for 2026 by the management. During the quarter, Extreme Networks (NASDAQ:EXTR) exhibited strength in recurring revenue through SaaS, along with growth indicators across the EMEA region.
Extreme Networks (NASDAQ:EXTR) develops and sells network infrastructure equipment and software to enterprise clients, offering AI-driven cloud solutions that are secure and automated. Its various service offerings are clubbed under ExtremeCloud IQ, ExtremeCloud IQ-Site Engine, and ExtremeCloud IQ Essentials categories. The company also provides hardware and software solutions for network management, analytics, and security.
5. F5 Incorporated (NASDAQ:FFIV)
Number of Hedge Fund Holders: 40
F5 Incorporated (NASDAQ:FFIV) is one of the 11 best communication equipment stocks according to hedge funds.
On January 28, the price target on F5 Incorporated (NASDAQ:FFIV) was raised from $296 to $305 by Morgan Stanley analyst Meta Marshall. She reaffirmed an Equal Weight rating on the stock following an impressive fiscal Q1. The analyst remains encouraged about the prospects; however, she seeks further visibility into software growth and the scaling of AI use cases before turning positive on the stock. Her revised price target still results in an upside of more than 10% from the prevailing level.
On January 28, James Fish from Piper Sandler maintained his Overweight rating on F5 Incorporated (NASDAQ:FFIV). In the process, he also raised the price target from $295 to $325, yielding roughly 18% upside potential.
Fish noted a minute demand disruption for the business during the last quarter. He also highlighted the company’s strong hybrid multi-cloud pipeline, AI advancements, delivery/security convergence, and a robust product refresh, which have led to an optimistic outlook for the coming year.
F5 Incorporated (NASDAQ:FFIV) is a provider of multi-cloud application security and delivery solutions, ensuring speed, security, and availability across different architectures. It delivers AI-enhanced security, API protection, and multi-cloud services for enterprise clients. The business entails distinct operations such as F5 Distributed Cloud Services, NGINX, and BIG-IP hardware & software solutions.
4. Motorola Solutions (NYSE:MSI)
Number of Hedge Fund Holders: 51
Motorola Solutions (NYSE:MSI) is one of the 11 best communication equipment stocks according to hedge funds.
As of the close of play on February 9, consensus sentiment around Motorola Solutions (NYSE:MSI) was highly bullish. The stock had received coverage from 5 analysts, all of whom have assigned Buy ratings. With no Sell rating, it carries a projected median 1-year price target of $462.25, implying upside of more than 10%.
On January 5, Piper Sandler analyst James Fish upgraded his rating on Motorola Solutions (NYSE:MSI) from Neutral to Overweight. However, the analyst lowered the stock price target from $465 to $443.
Fish attributed his unchanged thesis to Motorola’s leadership in LMR, noting an ongoing renaissance across public safety and major events in major geographies. The analyst acknowledged an AI-driven momentum in Video Safety, which has led to strong capital allocation by the company. Bookings growth has resumed amid an increased significance of drone security management, which has improved the demand backlog. Fish believes that the 15% valuation compression has created a more attractive entry point for investors.
Motorola Solutions (NYSE:MSI) offers public safety and enterprise security solutions and operates through two segments: Products & Systems Integration and Software & Services. The company deploys land mobile radio devices to integrate critical communications, video security, and command center technologies. It also offers security solutions through AI-powered video systems, surveillance cameras, and tools.
3. Lumentum Holdings (NASDAQ:LITE)
Number of Hedge Fund Holders: 69
Lumentum Holdings (NASDAQ:LITE) is one of the 11 best communication equipment stocks according to hedge funds.
On February 4, Samik Chatterjee from J.P. Morgan raised his price target on Lumentum Holdings (NASDAQ:LITE) from $350 to $565. He reiterated an Overweight rating on the stock following the company’s “strong” numbers for fiscal quarter two, which beat consensus estimates. Chatterjee also noted that management provided highly robust third-quarter guidance, establishing a path for sustained growth in the following quarters.
On February 4, Christopher Rolland from Susquehanna also increased his price target for Lumentum Holdings (NASDAQ:LITE) from $420 to $550, reaffirming a Positive rating on the stock.
Rolland’s rating was part of Susquehenna’s adjustments to its model after strong quarterly results. The analyst anticipates a positive medium-term outlook for OCS and CPO scale-out, along with scale-up in three new significant markets.
Lumentum Holdings (NASDAQ:LITE) develops and sells optical and photonic products, with a focus on high-performance lasers, modules, and subsystems. It operates in two segments: Cloud & Networking and Industrial Tech, serving markets including cloud, networking, consumer electronics, and industrial.
2. Cisco Systems (NASDAQ:CSCO)
Number of Hedge Fund Holders: 74
Cisco Systems (NASDAQ:CSCO) is one of the 11 best communication equipment stocks according to hedge funds.
On February 10, Cisco Systems (NASDAQ:CSCO) announced Silicon One G300, which is a 102.4 Tbps switching silicon designed for large-scale AI cluster buildouts. The management stated:
“The Cisco Silicon One G300 will power new Cisco N9000 and Cisco 8000 systems that push the frontier of AI networking in the data center. The systems feature innovative liquid cooling and support high-density optics to achieve new efficiency benchmarks and ensure customers get the most out of their GPU investments. In addition, the company enhanced Nexus One to make it easier for enterprises to operate their AI networks – on-premises or in the cloud – removing the complexity that can hold organizations back from scaling AI data centers.”
Back on January 20, Cisco Systems (NASDAQ:CSCO) revealed a multi-year collaboration with Georgetown University aimed at modernizing their campus network to provide high-end connectivity and modern digital services through Cisco’s newest networking tools.
This initiative features an extensive rollout of Wi-Fi 7 across Georgetown’s classrooms, dorms, and stadiums. By spearheading one of the largest Wi-Fi 7 deployments in the academic sector, Georgetown is establishing itself as a pioneer in wireless innovation. Cisco will headline the annual “Hoya Forward” platform every January of each year, hosting hackathons to drive student innovation and creative new beginnings.
Cisco Systems (NASDAQ:CSCO) designs and sells digital communication technologies, such as networking hardware, software, cloud, and security. The company ensures connectivity for large data centers, branches, and campus networks by interconnecting public and private wireline and mobile networks. Other offerings include access management, threat intelligence, detection, collaboration devices, contact center platforms, and more.
1. Arista Networks (NYSE:ANET)
Number of Hedge Fund Holders: 92
Arista Networks (NYSE:ANET) is one of the 11 best communication equipment stocks according to hedge funds.
On February 10, Michael Genovese from Rosenblatt raised his price target for Arista Networks (NYSE:ANET) from $140 to $165. He reaffirmed his Neutral rating on the stock, which now offers a 20% upside potential at the prevailing level.
Genovese’s rating comes prior to the company’s fourth-quarter announcement. He noted favorable developments on Arista’s recent wins and opportunities. The analyst also acknowledged the company’s multiple fabric solutions that have enabled a prolonged share retention at Meta compared to what had been previously anticipated.
On January 26, Wells Fargo Analyst Aaron Rakers shared his thoughts on Microsoft’s (MSFT) rollout of its second-generation Maia 200 AI chips. These are designed specifically to power OpenAI’s GPT 5.2 and Microsoft Copilot, highlighting the company’s reduced dependency on Nvidia (NVDA). Rakers described this development as “derivative positive” for Arista Networks (NYSE:ANET), given Microsoft’s shift toward Ethernet-driven scale-up support for AI workloads.
Arista Networks (NYSE:ANET) develops and sells high-performance, software- and data-driven client-to-cloud networking solutions. It predominantly facilitates AI, data center, and routing architectures. The company focuses heavily on low latency, automation, high-speed, and scalability, serving various market segments such as cloud service providers, financial services firms, government clients, healthcare, education, energy, and others.
While we acknowledge the potential of ANET as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than ANET and that has 100x upside potential, check out our report about this cheapest AI stock.
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