As the wireless equipment business heats up, the larger the footprint and strength of the top companies, the more likely they will continue to dominate the space, especially in wireless local area networking (WLAN).

A new research report from Deutsche Bank questions whether there is room for both the number of players and on the whole, profitability. Each standalone WLAN company has promised
Wall Street and investors over the long term that its respective business model had leverage. While some of these companies commanded significant gross margins, upward of an astonishing 70% in some cases, they are still unable to expand their operating margin despite promising the opposite. In other words, it is a survival of the fittest scenario, and it appears the biggest and strongest will continue to win the battles.

Here are the five stocks rated Buy at Deutsche Bank that will continue to dominate.

Ciena Corp. (NYSE: CIEN) is a company that many analysts, including the Deutsche Bank team, believe could be the top beneficiary of the increase in wireless spending. The company is rapidly reducing its losses, and the earnings growth outlook for the next five years is also quite promising. According to Yahoo! Finance, investors can expect Ciena’s earnings to improve at an annual rate of 16.7% for the next five years. The Deutsche Bank price target for the stock is $30. The Thomson/First Call price target is $28.50. Ciena closed Monday at $21.66 a share.

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Cisco Systems Inc. (NASDAQ: CSCO) has continued a string of positive news to Wall Street that began with its earnings surprise in May. The Deutsche Bank team cited several positive catalysts in the pipeline for Cisco, its dominance in wireless equipment and its undisputed 900-pound gorilla status in the industry. Many firms on Wall Street still feel that the stock is providing investors a good entry point. Shareholders are paid a solid 3.1% dividend. The Deutsche Bank price target is $30. The consensus target for the networking giant is $25.61. Cisco closed Monday at $24.85.

F5 Networks Inc. (NASDAQ: FFIV) has started to gain some solid buying traction over the past six weeks. The company provides solutions for an application-based world. It helps organizations seamlessly scale cloud, data center and software defined networking deployments to successfully deliver applications to anyone, anywhere, at any time. F5 Solutions broaden the reach of information technology through an open, extensible framework and a rich partner ecosystem of leading technology and data center orchestration vendors. This approach lets customers pursue the infrastructure model that best fits their needs over time. The Deutsche Bank price target is $135, and the consensus target is $121.63. Shares closed Monday at $111.44.

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Mavenir Systems Inc. (NYSE: MVNR) is a leading provider of software-based communications solutions that enable mobile service providers to deliver high-quality Internet protocol-based voice, video, rich communication and enhanced messaging services to subscribers globally. Mavenir’s mOne software platform has enabled leading mobile service providers to introduce the industry’s first live network deployment of voice over LTE (VoLTE) and the industry’s first live deployment of next-generation Rich Communication Services 5.0. The Deutsche Bank price target is $18. The consensus target is $18.25. Mavenir closed Monday at $15.15.

Qualcomm Inc. (NASDAQ: QCOM) remains the other 900-pound gorilla in the wireless space, despite its slight earnings miss last quarter. The company expects 6% growth in developed markets, with shipments at 443 million. Qualcomm’s system on a chip (SoC) will go into 1.22-1.3 billion devices this year. This represents a consolidated growth rate of 13% to 20%. Because Qualcomm operates at such economies of scale, the company has a lot of flexibility when it comes to pricing. That means it can produce margin gains better than many competitors. Investors are paid a 2.1% dividend. Deutsche Bank’s target price for the stock is $90. The consensus target is $85.49. Qualcomm closed Monday at $79.20

As the wireless world continues to explode, the companies that focus on new network applications that will support increasing mobile use are the companies that will win the battle. Mobile computing via smartphones and tablets is totally changing the game for everything from advertising to entertainment. Stocks that cater to, and support the technological change, will be the ultimate winners.

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