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Nokia Shares Double as AI Infrastructure Drives Investor Optimism
Nokia’s shares have surged to a 100‑percent rally, transforming a once‑cautious telecom vendor into a coveted supplier of AI‑driven networking gear.
The upturn began in Q1 2026, when the company posted a 54% year‑on‑year jump in comparable operating profit to €281 million—well ahead of consensus. AI‑ and cloud‑related sales climbed 49% to €350 million, and Nokia secured €1 billion in new orders, largely in optical transport and IP networking equipment for large cloud operators.
Bank of America confirmed a buy rating and raised its target price to €15.6 from €14.4, citing a 44% upside. The bank emphasized that investors will focus on Nokia’s order intake from AI and cloud customers during the July 23 second‑quarter earnings call, and that hardware orders tied to AI technology should stay at least in line with the €1 billion booked in Q1.
Jefferies followed suit in a June 30 report, lifting its price target to €13.8 from €10.7. The brokerage highlighted Nokia’s expanding engagement with hyperscalers across its optical portfolio and the IP Networks division’s traction from switch wins with a major hyperscaler. Jefferies projects that this momentum will fuel higher growth and margin expansion in 2027 and 2028, with cloud‑ and AI‑related revenue expected to grow 27% annually in 2027—above the company’s 2026 guidance of 18–20%.
Nokia’s own outlook was revised in tandem with the Q1 results. The firm now forecasts AI and cloud market growth at 27% per year for 2025–2028, up from an earlier estimate of 16%. Jefferies raised its 2027 earnings‑per‑share forecast by 13% and expects the FY27 EPS estimate to be 15% ahead of consensus. The brokerage also projects the Network Infrastructure operating margin to rise to 16.8% in 2027 from 13.8% in 2026.
Risks persist. Nokia’s resurgence hinges on sustained capital spending by hyperscalers on data‑centre infrastructure. A slowdown in cloud operators’ expansion could weaken demand for optical and IP products. Jefferies cautions that Nokia must prove it can capture a larger share of data‑centre deployments and avoid falling behind competitors in optics and switching.
The company’s share price, which has doubled this year, will be closely watched in the upcoming July earnings report. Investors will look for evidence that AI‑related order intake remains robust and that the €1 billion backlog from Q1 translates into revenue growth in the second half.
The latest broker upgrades and Q1 performance suggest that Nokia is being repositioned as a key supplier of high‑speed networking infrastructure for AI‑driven data centres—a shift that could reshape its valuation and long‑term growth prospects.
The upturn began in Q1 2026, when the company posted a 54% year‑on‑year jump in comparable operating profit to €281 million—well ahead of consensus. AI‑ and cloud‑related sales climbed 49% to €350 million, and Nokia secured €1 billion in new orders, largely in optical transport and IP networking equipment for large cloud operators.
Bank of America confirmed a buy rating and raised its target price to €15.6 from €14.4, citing a 44% upside. The bank emphasized that investors will focus on Nokia’s order intake from AI and cloud customers during the July 23 second‑quarter earnings call, and that hardware orders tied to AI technology should stay at least in line with the €1 billion booked in Q1.
Jefferies followed suit in a June 30 report, lifting its price target to €13.8 from €10.7. The brokerage highlighted Nokia’s expanding engagement with hyperscalers across its optical portfolio and the IP Networks division’s traction from switch wins with a major hyperscaler. Jefferies projects that this momentum will fuel higher growth and margin expansion in 2027 and 2028, with cloud‑ and AI‑related revenue expected to grow 27% annually in 2027—above the company’s 2026 guidance of 18–20%.
Nokia’s own outlook was revised in tandem with the Q1 results. The firm now forecasts AI and cloud market growth at 27% per year for 2025–2028, up from an earlier estimate of 16%. Jefferies raised its 2027 earnings‑per‑share forecast by 13% and expects the FY27 EPS estimate to be 15% ahead of consensus. The brokerage also projects the Network Infrastructure operating margin to rise to 16.8% in 2027 from 13.8% in 2026.
Risks persist. Nokia’s resurgence hinges on sustained capital spending by hyperscalers on data‑centre infrastructure. A slowdown in cloud operators’ expansion could weaken demand for optical and IP products. Jefferies cautions that Nokia must prove it can capture a larger share of data‑centre deployments and avoid falling behind competitors in optics and switching.
The company’s share price, which has doubled this year, will be closely watched in the upcoming July earnings report. Investors will look for evidence that AI‑related order intake remains robust and that the €1 billion backlog from Q1 translates into revenue growth in the second half.
The latest broker upgrades and Q1 performance suggest that Nokia is being repositioned as a key supplier of high‑speed networking infrastructure for AI‑driven data centres—a shift that could reshape its valuation and long‑term growth prospects.
