After years of struggling to compete with lower-cost Chinese counterparts, European telecommunications companies Nokia and Ericsson stand to win big from the U.S.-China trade war, CNBC's Jim Cramer argued Wednesday.
"These once-beleaguered companies now have a chance to win the race for 5G supremacy," he said on "Mad Money." "Their equipment might be more expensive than what the Chinese can make. Sometimes I think a lot of people would say it's even lower quality. Actually, I think the majority might say that. But you better believe neither Sweden nor Finland are pressuring their companies to spy on their customers."
Which stock wins out? Cramer thought both companies' most recent earnings reports were solid, with Ericsson delivering strong sales and a bullish outlook for the year ahead and Nokia issuing good headline numbers. And even though Nokia's stock dropped on what some saw as weak outlook for the first half of 2019, Cramer didn't agree with the move.
"The truth is Nokia's stock soared higher when Ericsson posted good numbers the week before, and stocks that run up into earnings tend to sell off even on strong numbers. Now, Nokia's American shares are at $6.05, which, to me, is crazy," he said. "I prefer Nokia here, both because it's too cheap here and because it has a better portfolio of end-to-end solutions. I have not recommended Nokia since 1997."
Click here for Cramer's full take.