Airtel Africa‘s (LSE:AAF) been the top-performing FTSE 100 stock in the last month. The share price is up 26.85% – enough to generate a £268 return on a £1,000 investment.
There are also a lot of potential growth opportunities ahead of the company over the long term. So should investors think the stock can keep climbing for a long time to come?
Opportunities
Airtel Africa’s success hasn’t just come in 2025. Over the last five years, the share price has almost doubled as the company has increased its subscribed base by just under 50%.
The company provides mobile phone, data, and mobile money services in 14 African countries. And despite its impressive growth since 2020, there’s still a big market available.
The total population of the countries Airtel Africa operates in is 500m. And mobile penetration’s below 50% in some of those countries, while less than 30% of people have a bank account.
These are countries where the median age is around 20 and the population”s growing. So it’s easy to see why there could still be a long way to go for the company and the stock.
Currency
There are however, some big risks that come with investing in this type of business. The most obvious is the currency risk.
Over the last five years, the value of the Nigerian naira against the British pound has fallen by 75%. And if this continues, it could significantly weigh on profits.
With other currencies – like the US dollar – investors might think the risk of fluctuating exchange rates is small enough to ignore. But I don’t think that’s so easy to do in this case.
Forecasting exchange rates isn’t easy. But given the potential significance, I think the continued decline of the Nigerian naira is something Airtel Africa shareholders have to plan for.
Capital intensity
The other big risk with Airtel Africa is that providing mobile services requires a lot of infrastructure, such as mobile towers and fibre optic networks. And this is expensive to install and maintain.
In general, investors need to be wary of businesses that have high ongoing capital requirements. This can cut into the cash that’s available for things like dividends and share buybacks.
Companies like BT in the UK and Verizon in the US generally haven’t been great stocks to own. And their constant need to maintain their infrastructure has been a key part of this. Arguably however, this is because they haven’t had same growth prospects as Airtel Africa. And a weaker Nigerian naira actually has the effect of making ongoing expenses less onerous.
Is there more to come?
With a huge market still to address, Airtel Africa arguably has better growth opportunities than any other FTSE 100 company. What that means in terms of investment returns however is less clear.
I wouldn’t be surprised to see the stock continue to climb. But there’s too much uncertainty for me to want to buy, especially when I think there are more obvious opportunities elsewhere.
