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    Will Cable Shortlisting Change NEC (TSE:6701) Stock Narrative

    Simply Wall St·10/23/2026 13:41:29
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    • NEC has been shortlisted alongside France's Alcatel Submarine Networks to supply the US-backed MViSTA undersea data cable linking Malaysia, Vietnam, Singapore and Thailand. Developers are expected to choose a supplier after October 2026, and the system is targeted to enter service in 2028, while avoiding Chinese vendors and contested South China Sea routes.
    • The project highlights NEC's role in high-capacity digital infrastructure for Southeast Asia, with commercial potential that extends beyond the cable itself into linked assets such as planned data centre projects in southern Vietnam that intend to rely on non-Chinese core technologies.
    • We will examine how NEC's investment narrative is shaped by its finalist role on the MViSTA cable, a key US-backed infrastructure project.
    Capitalize on the push into secure digital infrastructure by lining up NEC alongside other potential beneficiaries in undersea data and data-centre buildouts with 55 AI infrastructure stocks.

    NEC Investment Narrative Recap

    To own NEC, you need to buy into a shift toward higher margin digital platforms like BluStellar, while legacy telecom hardware and macro headwinds are managed tightly. The US backed MViSTA cable shortlisting supports that data infrastructure angle but does not change the near term story, which still hinges on execution in AI, software and IT services.

    The immediate catalyst remains whether management can move low profit units and Telecom Services onto a more profitable footing while keeping component and macro pressure inside its planned downside. The biggest risk is that hardware centric segments weaken more than expected, which could offset BluStellar and AI driven gains and limit operating progress.

    In this context, NEC’s participation in the Japan AI consortium that is slated to receive up to US$6.1b of government backing looks directly relevant. MViSTA points to rising data traffic and security needs, and the consortium illustrates how NEC aims to supply AI and cybersecurity layers that sit on top of that connectivity.

    Both developments can be viewed against the BluStellar target of ¥1.3t of revenue at a 25% margin by FY March 2031. Progress on large infrastructure linked projects and AI programs gives NEC more routes to that goal, although execution risk in Telecom Services, component supply and restructuring remains in the background of every new contract.

    What The NEC Consensus Numbers Assume

    On current analyst estimates, NEC is pegged to reach ¥4,355.8b in revenue and ¥418.9b in earnings by 2029, built on a 5.7% yearly revenue growth rate and an earnings uplift of about ¥118.3b from today’s ¥300.6b base.

    Discover why NEC's fair value indicates a 17% potential upside to its current price that may not last much longer.

    TSE:6701 1-Year Stock Price Chart
    TSE:6701 1-Year Stock Price Chart

    Exploring Other Perspectives

    One alternate view is that the real swing factor for NEC is slower BluStellar and software traction rather than projects like MViSTA. The most cautious analysts were only pencilling in about ¥4,113.7b of revenue and ¥373.9b of earnings by 2029 before this cable news. That is a more muted story. Use those gaps as a prompt to compare several viewpoints and decide which version of NEC’s future feels more realistic to you.

    Explore 3 other NEC fair value estimates, including one that suggests as much as 28% downside from the current price!

    Form Your Own Verdict

    Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so consider developing your own perspective.

    Looking for more NEC investment ideas beyond this stock?

    Once you have a view on NEC, it often helps to compare it with other listed businesses that share similar quality markers or risk profiles. The Simply Wall St Screener can help you quickly sort through the market using clear fundamental filters instead of guesswork.