Verizon and T-Mobile are among Canaccord Genuity analyst Greg Miller's top stock picks for telecommunications for 2014.
Miller also recommends Akamai Technologies for cloud computing; Cogent Communications Group for competitive carriers; Equinix, Interxion Holding NV and 21 Vianet for data centers; and SBA Communications, American Tower and Crown Castle Communications for tower stocks.
"Retail colocation remains the crown jewel of data center market," Miller said. "Protected by high barriers to entry and supported by growing demand in online video, cloud computing and low-latency applications, retail colocation operators remain well positioned to leverage the secular growth of IT outsourcing, in our view. We expect cloud-adoption rates and Internet traffic growth to further accelerate in 2014, disproportionally benefiting the retail colocation operators."
Miller gives several predictions for 2014, including an overall improvement in the competitive carrier segment and an attractive, but increasingly crowded, cloud computing market. He also says shifting market share will highlight incremental wireless competition and LTE adoption along with spectrum deployment, which will drive the next wave of tower growth.