This week, in our focus on the winning analysts in each industry category from our

Analyst Rankings -- Equity 2000

, we profile the top analysts tracking telecommunications equipment stocks. Next week, we look at analysts covering computer hardware. (Check out our last focus,

managed health care.)

Telecommunications equipment is a broad name that covers a group of companies involved in three distinct, although increasingly interrelated, businesses: wireless equipment, telephone equipment and data networking. All three fields are undergoing rapid technological change as Internet innovations bring the worlds of data and voice transmission ever closer.

The hottest field in this sector is fiber-optic networking, an area that has boomed in the past year as companies seek ways to send ever-increasing amounts of data through the cables that serve as the arteries of the Internet. Traditional networks send electrical signals through copper cables, while fiber-optic networks send light waves through glass fibers. Fiber-optic networks already exist in many areas, especially in long-distance pathways. But the existing networks use a combination of light and electricity to send their signals. By contrast, the "all-optical networks" being developed by many young start-ups promise to use only light beams for their signal transmission, though no such system has yet been implemented.

The stocks that our top-rated analysts favor most in the fiercely competitive and still-emerging all-optics field are July 28 IPO

Corvis

(CORV) - Get Report

and October 1999 IPO

Sycamore

(SCMR)

. Shares of Corvis, singled out by first-place winner Gregory Geiling and third-place winner James Jungjohann, more than doubled on the first trading day, but recent prices have remained in a range little changed from the opening-day close. Geiling's other top pick, Sycamore, has risen more than tenfold above its offering price of $12.67, but that spectacular ascent belies an exceedingly volatile trading pattern: Shares went as high as $170 in March but then fell as low as $49 in April. They have traded lately in the $140 range.

Among more established optics names,

Nortel

(NT)

TST Recommends

is tagged by third-place winner Nikos Theodosopoulos. The company is the acknowledged leader in optical networking.

In wireless equipment, No. 2 analyst Alex Cena believes that third-generation mobile-phone technology will boost revenues for many of the major wireless players, especially European names

Ericsson

(ERICY)

and

Nokia

(NOK) - Get Report

.

The analysts' major concerns in the sector include rich valuations and the possibility that telecom service providers will reduce their spending on all this new technology. (Signs of a looming cash crunch among network operators have already appeared: See our related

stories.) Then, too, companies that have established a firm leadership position in one technology are always at risk of being bypassed in the next leg of the technological race.

Telecommunications Equipment

Rate Their Stock Picks:

Which stock do you like best?

Geiling and Jungjohann: Corvis

Cena: Ericsson

Theodosopoulos: Nortel

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