We recently published a list of the 13 Best Telecom Stocks to Buy According to Hedge Funds. In this article, we are going to take a look at where Iridium Communications Inc. (NASDAQ:IRDM) stands against other best telecom stocks.
The global telecom services market is estimated at $1.98 trillion as of 2024, according to Grand View Research. It is projected to grow at a CAGR of 6.5% from 2025 to 2030. This expansion is driven by the increasing expenditures on 5G infrastructure deployment, which is fueled by a shift in customer preference towards next-generation technologies and smartphone devices. Additionally, the rising number of mobile subscribers, the soaring demand for high-speed data connectivity, and the growing need for value-added managed services are key factors that contribute to this market growth.
Initially a trend in 2019, 5G has solidified its position as a critical driver of the industrial economy. The Future of Commerce reported that the global 5G connections are projected to surge from 1.76 billion in 2023 to 7.9 billion by 2028. This indicates that 5G will constitute over half of all connections, as per reports from 5G Americas and Omdia. This expansion is driven by investments from government and telecom companies, as well as the demand for faster internet speeds, lower latency, and improved battery life. While 5G deployment continues, 6G is emerging and promises ultra-high data speeds via terahertz spectrum bands, low latency, and AI integration. It aims to revolutionize communication through applications like smart grids and immersive XR experiences. However, challenges like energy efficiency and responsible AI integration remain. Telecom companies stand to capture a $100 billion opportunity within the 5G economy.
AI is deeply ingrained in the telecom sector as well. It evolved from basic echo cancellation in the 1950s to sophisticated algorithms for network management and failure prediction. In 2025, AI’s role will intensify, with global telco investments projected to rise from $3.34 billion in 2024 to $58.7 billion by 2032. AI is crucial in network topology improvements. It facilitates self-healing networks, automated transitions, and AR applications. It will drive 6G’s evolution towards connected intelligence and enhance predictive maintenance, fault detection, security, and customer experiences through predictive and cognitive AI.
Our Methodology
We used the Finviz stock screener to compile an initial list of top telecom stocks. We then selected the 13 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A technician inspecting a satellite dish, highlighting the Mobile Voice and Data Services scope.
Iridium Communications Inc. (NASDAQ:IRDM)
Number of Hedge Fund Holders: 38
Iridium Communications Inc. (NASDAQ:IRDM) provides satellite-based mobile voice and data solutions. It offers communications services to sectors like government, maritime, aviation, and IoT. Using its unique low-earth orbit satellite constellation, it delivers reliable connectivity in remote and challenging environments.
The company’s core telecom business centers on its satellite communication services. The company’s commercial IoT saw a 15% growth in Q4 2024, and commercial voice and data revenue increased by 3% in the same period. This is underpinned by the company’s reliable global L-band network, which is a key differentiator in the satellite communication market, particularly for safety and mission-critical applications.
Iridium Communications Inc. (NASDAQ:IRDM) is investing in new technologies and services to further expand its telecom offerings. This includes advancements in IoT with Iridium Certus IoT, which offers faster speeds and direct cloud connectivity. It’s also developing Iridium NTN Direct for direct-to-device communication. Additionally, it’s expanding its presence in the maritime sector with services like GMDSS (Global Maritime Distress and Safety System).
Overall, IRDM ranks 8th on our list of the best telecom stocks to buy according to hedge funds. While we acknowledge the growth potential of IRDM, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than IRDM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
