Keysight (KEYS) And NVIDIA To Expedite 5G Network Deployment

Keysight Technologies Inc. (NYSE:KEYS) recently announced that it is collaborating with NVIDIA (NASDAQ:NVDA) to speed up the development of high-value mobile services and flexible virtualized networks.

Per the terms of the deal, semiconductor giant, NVIDIA will utilize Keysight’s UE emulation (UEE) solutions to test its Aerial software development kit (SDK). Notably, the Aerial SDK is aimed at enabling telecom companies roll out software-defined 5G virtual radio access networks.

Markedly, Keysight’s suite of UEE solutions allow network equipment manufacturers (NEMs) and mobile operators to test and certify 5G and legacy radio access networks, and other virtualized radio access network (vRAN) architecture based networks. The solutions are 3GPP-compliant.

The NVIDIA deal is a major win for Keysight as it highlights strength of its test solutions and is expected to boost its top line in the coming quarters.

Keysight Technologies Inc. Price and Consensus

Keysight Technologies Inc. Price and Consensus

Keysight Technologies Inc. price-consensus-chart | Keysight Technologies Inc. Quote

Partnerships to Aid Top-Line Growth

The partnership with NVIDIA is part of Keysight’s strategy of leveraging its partner ecosystem to expedite the global rollout of 5G based networks.

Notably, the company recently partnered with VIOMI (NASDAQ:VIOT) to accelerate the introduction of 5G enabled IoT devices in the Chinese market. VIOMI will use Keysight’s 5G solutions to validate the radio frequency (RF) performance of its IoT devices for home applications.

Keysight has also collaborated with Qualcomm (NASDAQ:QCOM) to use 5G vRAN architecture to speed up the deployment of small cell radio units (RU) critical for a variety of 5G use cases.

These endeavors are expected to aid Keysight in capitalizing on the growing infrastructure investments in the deployment of 5G mobile networks. Notably, Keysight’s solutions have already been adopted by major U.S. mobile operators to validate more than 600 test cases for their respective 5G new radio (NR) device acceptance plans.

Additionally, the company is well positioned to address demand in the 5G endpoint installed base market, which per MarketsAndMarkets, is expected to witness a CAGR of 55.4% between 2020 and 2025.

Coronavirus Pandemic a Likely Headwind

Nevertheless, the global COVID-19 pandemic is expected to have negatively impacted Keysight’s growth ambitions.

Notably, the company recently provided an updated outlook stating it may not be able to meet its guidance for second-quarter fiscal 2020.

However, amid the market disruptions and uncertainty, Keysight’s focus on emerging markets like IoT and high-speed data centers bodes well. Additionally, medical devices and pharmaceutical markets hold immense potential courtesy of growing usage of electronics-based testing equipment.

Zacks Rank

Currently, Keysight carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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