JPMorgan believes the market "has been too slow to react" to Nokia's revenue potential in AI and cloud. The company's order book points to 2027 and 2028 earnings estimates that consensus is not modelling, the analyst tells investors in a research note. Nokia has also gained share in internet protocol networks, adds JPMorgan. The firm believes Nokia will be able to line up component supply to "ramp up much more significantly" in 2027 and in 2028. Nokia remains a top pick at JPMorgan with an Overweight rating and $21 target price, offering 100% upside. https://x.com/TipRanks/status/2090010591200997696

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Source

We are seeing a strong amount of interest in Nokia from some of our most important Hedge Fund and LO clients over the last 48 hours. We forecast:

1. Increased guidance at both Q3 and Q4
2. A rapidly growing backlog
3. Accelerating Optical + IP revenues
4. Growth and steady margins in Mobile Infrastructure

• Nokia's orders and backlog are rising rapidly as the company takes share in both optical and switching within data centers. We see a rapidly growing backlog, accelerating Optical + IP revenues, and growth with steady margins in Mobile Infrastructure.
• Capacity constraints are limiting 2026 upside, but significant capacity is being added from H2 2026.
• We therefore expect Network Infrastructure revenues and earnings growth to accelerate through 2027 and 2028.
• Mobile Infrastructure is also showing above-industry growth rates.
• We forecast over 30% earnings growth in 2027.
• Could we get a surprisingly positive FY27 guide? There is scope for Nokia to upgrade its guidance at Q3 once it has clearer visibility into the capacity ramp, and then provide a very strong FY27 guide at Q4.

Source

Short sellers on the Yahoo forum are making extreme claims. I fought fire with fire, even though I fully understand that the Q2 orders were very likely exceptionally large. Here is my short comment to a message bashing Nokia:

u/Aldo "Pump the 8 percent of Nokia that is supposedly AI and ignore the 92 percent that is no margin or negative margin commodity junk."

Thought experiment: subtract the AI & Cloud sales from the Q2 revenue and add instead the Q2 AI & Cloud orders (€2.8B). If you do so, AI & Cloud would be 39% of Nokia's sales.

This just shows that sales are lagging orders and AI & Cloud is about to reach a very much higher share of sales when orders become sales. Nokia's Lehigh Valley (PA) packaging and testing 10x expansion starts in Q3 while the San José (CA) optical chip fab (increasing capacity 20x) starts commercial production in late 2026. 2029 may see even more optical capacity getting online in Chandler (AZ). IP Networks is also just accelerating while AI-RAN will only launch in 2027. Who draws conclusions based at this year's numbers is ignoring the dynamic about to fundamentally change Nokia's market position.

Excerpt:

Nokia (NYSE:NOK) has spent the past year rebuilding its story around AI, and earlier on July 14, it added another data point. The company signed a 5G expansion agreement with Taiwan Mobile to deploy its AirScale portfolio and AI-driven software across the carrier's network, part of a broader push toward what Nokia calls AI-native mobile infrastructure. The deal lands alongside a wave of insider stock purchases and a deepening Nvidia partnership, all pointing toward the same bet: that AI traffic is about to overwhelm the networks carrying it, and Nokia wants to be the company that fixes that.

The Taiwan Mobile agreement is built around four distinct AI applications rather than a single upgrade. Nokia's AI for Network software, including its Predictive Hardware Analytics service and MantaRay SON self-organizing network tool, automates operations and enables closed-loop network assurance in real time. Separately, next-generation baseband and radio hardware increases capacity and uplink performance specifically to handle AI-driven traffic, while AI-powered energy management helps Taiwan Mobile hit its sustainability targets, and AI-enabled self-healing capabilities strengthen resilience during outages. Taken together, the deployment sets up support for 5G-Advanced features like network slicing and RedCap.

That kind of upgrade is becoming urgent rather than optional. Generative AI traffic is already driving more than twice as much uplink data as ordinary mobile use, according to Aetha Consulting, and total network load could grow by as much as 10x current levels. Nokia has been building toward this since last October, when it began developing sixth-generation RAN technology, and in June it launched the industry's first commercial AI-RAN platform, offering 20% higher spectral efficiency than existing systems. Management expects that figure to reach 50% next year and 100% by 2028. The 6G equipment market alone is projected to exceed $50 billion by the first half of the 2030s, growing more than 20% annually, a meaningful expansion opportunity for a company that generated roughly $23 billion in revenue last year. https://finance.yahoo.com/technology/ai/articles/nokia-nok-ai-network-bet-193932563.html

Someone said on a forum I should be more specific on what exactly Nokia's AI trajectory means numerically. However, I don't think it's possible to forecast Nokia's exact 2027 revenue or operating profit with any confidence, because too many variables remain unknown. But there is quite a lot we do know.

Revenue side

Nokia's relevant AI & Cloud addressable market is forecast to grow at a 27% CAGR, but it still is too soon to say exactly how much Nokia's optical sales will grow next year as additional capacity comes online, including the new San José plant. Nokia will also have a new DSP product family from around mid-next year that may start contributing to sales. IP Networks growth is another open question in terms of magnitude, although order dynamics improved considerably in Q2.

Orders are starting to translate into revenue and AI & Cloud is becoming significant

Realized AI & Cloud sales, year over year:

• Q1: €180M → €350M (+49%, constant currency and portfolio)
• Q2: €220M → €446M (+105%, constant currency)

Last year, AI & Cloud orders totaled €2.4B. Over the last four quarters, they've totaled roughly €5.4B:

• Q3 2025: €650M
• Q4 2025: €950M
• Q1 2026: €1.0B
• Q2 2026: €2.8B

The order-to-sales ratio was just under 3 in Q1 and over 6 in Q2, so orders have been accumulating much faster than they have so far translated into revenue. Hotard has said order-to-delivery typically takes 12–18 months in Optical and somewhat less in IP, while Nokia expects roughly half of Q2's €2.8B order intake to be delivered within 12 months.

Q2's €2.8B was probably exceptional, so I wouldn't use it as a normal quarterly run rate. But a roughly €1B quarterly order pace looks like a reasonable near-term baseline: Nokia reached that level in Q4 and Q1 and then substantially exceeded it in Q2. With IP Networks' order momentum also improving, it's possible the order trend is moving higher. With the existing backlog and delivery lag, I think it's entirely plausible that AI & Cloud's quarterly sales pace approaches €1B sometime next year, implying roughly €4bn in annualized revenue.

Less restructuring drag on profits

This year's restructuring programs are expected to have about €800M of P&L impact. Next year's figure could be only €100–200M, mainly the tail end of the China and Infinera programs. So, absent new restructuring programs, the reported reuslt of 2027 should be burdened by €600–700M less in restructuring-related charges.

There should also be a lighter underlying cost structure. For example, the original Infinera integration target was €200M in annual savings, of which €100M was expected by the end of 2026. The China program is also targeting €200M in savings. If, purely as an assumption, there are still €200M of savings to come from the 2023–2026 program, €67M from Infinera and €150M from the China program, cost efficiency could improve by about €400M next year versus this year's level. These are gross savings, of course, so the net effect could be smaller if Nokia increases spending in areas it considers strategically important, such as R&D.

What about AI-RAN?

AI-RAN is a separate direction worth watching. In the early stages, its importance to Nokia may be more about repairing the cost structure than growing revenue. If moving toward a more software-based business reduces Nokia's reliance on proprietary chip development, and the substantial R&D spending that comes with it, while increasing the share of higher-margin software, the impact on the currently weakly profitable Radio Networks business could be significant. But AI-RAN is a long project. Commercial availability begins next year, while Hotard has indicated that volume deliveries are more of a 2028 story.

Bottom line

Naturally, the market prices all of Nokia, not just AI & Cloud. That's exactly why the changing business mix matters. If AI & Cloud grows in a relatively short period from today's small business into a multi-billion-euro business, its weight at the group level changes rapidly. At the same time, IP Networks' order dynamics also appear to be improving based on Q2.

Nokia is also radically changing its wireless networks business model, moving toward software-centric AI-RAN. This could enable a greater share of recurring software income, performance upgrades through software rather than hardware replacements, and potentially a slimmer cost structure through lower hardware and custom-silicon R&D costs.

AI & Cloud is today still a smallish business — less than 10% of total group sales in Q2 — but based on its order intake and Nokia management's own capacity investment decisions, it is becoming a business of real size for Nokia, with substantial growth potential still ahead. And that transition is no longer theoretical or far away.

TLDR: A thought-provoking and decidedly bullish analysis of Nokia’s AI strategy, arguing that Infinera and NVIDIA could become mutually reinforcing pillars of a much broader AI infrastructure opportunity. Infinera gives Nokia a strong position in the AI data-center buildout today, while NVIDIA, anyRAN and Nokia’s installed base could open major long-term opportunities in AI-RAN, software, edge AI and 6G. The bigger thesis: Nokia may be evolving from a traditional telecom equipment company into an increasingly important part of the infrastructure through which AI actually moves.

*****

Here is an extract from a much longer article by Akhenaton Analysis:

NVIDIA and Infinera Are Re-Rating Nokia Together - What’s next to evaluate?

It should be clear by now that both Infinera and NVIDIA affect Nokia’s valuation through different time horizons.

Infinera is the near-term earnings engine. It strengthens Nokia’s optical portfolio, expands its webscale customer relationships and gives the company greater exposure to current AI data-center construction. Optical and IP growth, AI and cloud orders and improving Network Infrastructure margins provide observable financial evidence.

NVIDIA is the duration engine. It increases the possible length and breadth of Nokia’s growth runway by connecting the company to AI-RAN, edge computing, data-center switching, software subscriptions and 6G.

So the market has to assign value to the following several options:

• Nokia could become a larger supplier of optical and switching technology to AI infrastructure.
• Its SR Linux software could gain relevance through NVIDIA’s Spectrum-X ecosystem.
• Its installed AirScale base could become a distribution channel for AI-accelerated upgrades and software subscriptions.
• Its radio sites could eventually support external edge-AI workloads.
• Its anyRAN software could become an important layer in AI-native 6G networks.

Lets discuss them:

1. Nokia becomes a larger supplier of optical and switching technology to AI infrastructure. Estimated probability: 92 percent

This is the most advanced part of the thesis and should already be considered part of the base case.

In the second quarter of 2026, Nokia’s sales to AI and cloud customers increased 105 percent, while Optical Networks grew 20 percent and IP Networks grew 16 percent. The company received €2.8 billion in AI and cloud orders and expects approximately half of that amount to convert into revenue over the following twelve months.

Commercial evidence extends beyond order intake. Nscale has made Nokia a preferred networking partner for its global AI infrastructure expansion and already uses Nokia’s data-center switching and routing technology at its Stavanger facility. Telefónica selected Nokia as the exclusive networking provider for 17 edge data-center nodes in Spain, of which 12 have already been deployed. Nokia’s 800G coherent pluggables are shipping to a large United States customer, while Aureon is using Nokia’s ICE7 optical technology in a network capable of scaling to 400 terabits per second.

2. SR Linux gains relevance through NVIDIA’s Spectrum-X ecosystem. Estimated probability: 50 percent

NVIDIA and Nokia have formally agreed to collaborate on data-center switching using Nokia’s SR Linux software with the Spectrum-X Ethernet platform. They are also evaluating Nokia’s telemetry and fabric-management technology for NVIDIA AI infrastructure and exploring the possible inclusion of Nokia optical technology in future NVIDIA architectures.

The integration has progressed beyond a memorandum. SR Linux is now represented in NVIDIA DSX Air, allowing AI cloud builders to simulate, validate and automate Nokia-based network environments before physical deployment.

What remains absent is a publicly disclosed production customer using SR Linux on Spectrum-X or material revenue directly attributable to the integration.

SR Linux clearly has independent product relevance, as demonstrated by deployments with Nscale and partnerships with Supermicro. The uncertainty concerns how much additional distribution NVIDIA will provide and how much of the resulting economics Nokia can retain.

3. Nokia’s installed AirScale base becomes a distribution channel for accelerated upgrades and subscriptions. Estimated probability: 78 percent

Nokia has introduced a GPU-powered capacity plug-in designed specifically for existing AirScale baseband systems. Operators can add accelerated computing without replacing the entire chassis or radio infrastructure, the company has also announced a subscription model through which customers would receive continuing access to AI algorithms, spectral-efficiency enhancements and network-optimization capabilities. Pilots are expected by the end of 2026, followed by commercial availability in 2027.

This creates a credible channel for monetizing Nokia’s installed base twice: first through incremental computing hardware and then through recurring software.

Tests with T-Mobile and Indosat have already demonstrated Nokia RAN software operating on NVIDIA-accelerated infrastructure in operator environments. BT, Elisa, NTT DOCOMO and Vodafone are also involved in development or evaluation.

The remaining uncertainty is commercial rather than architectural. Nokia has not disclosed subscription prices, contract durations, customer volumes or expected margins. Operators also remain cautious about GPU cost, energy requirements and dependence on the CUDA ecosystem.

4. Radio sites support external edge-AI workloads. Estimated probability: 35 percent

Nokia and SoftBank have demonstrated that spare AI-RAN computing capacity can be identified and allocated to third-party AI tasks. T-Mobile has separately demonstrated concurrent RAN processing and AI applications on a single NVIDIA Grace Hopper server using live spectrum and commercial radio equipment.

For the model to work, operators must find customers requiring low-latency local inference, maintain sufficiently high GPU utilization and compete economically with centralized cloud providers. They must also operate distributed computing infrastructure across locations originally designed primarily for telecommunications equipment.

External edge workloads may eventually improve the return on AI-RAN investment, but I would assign only modest value to this option until operators disclose paying customers, utilization rates and pricing.

5. anyRAN becomes an important software layer in AI-native 6G networks. Estimated probability: 60 percent

Nokia’s anyRAN software has already been validated across NVIDIA-accelerated infrastructure and is being evaluated by a growing operator and technology ecosystem. The commercial AI-RAN platform announced in July 2026 uses the same software foundation across upgraded AirScale systems, dedicated AI-RAN nodes and cloud-native server deployments, with an intended software path from 5G and 5G-Advanced to 6G.

The broader direction is consistent with early 6G standardization. The ITU has included Artificial Intelligence and Communication as an official IMT-2030 use scenario and identified ubiquitous intelligence as a design principle. Final radio-interface standards, however, are not expected until the end of the decade.

Nokia therefore has an early architectural position, not a guaranteed standard. Operators may also demand hardware neutrality that limits the role of any NVIDIA-centered architecture.

Conclusion.

The probability that at least three of the five options become financially relevant by 2030 is, in my view, approximately 70 percent. The probability that every option succeeds materially is closer to 10 or 15 percent.

This is the central discipline required when valuing Nokia. The market is justified in recognizing that the company now owns several credible paths into AI infrastructure. It is not justified in valuing every path as though it has already reached commercial scale.

The Real Bet for Nokia

At the end of this article I hope my readers have a much broader view on Nokia current challenges and landscapes, much further than simply “optics orders are growing QoQ” or “Nokia has partnered with NVIDIA.”

The investment thesis therefore does not depend on Nokia becoming an “AI company.” That label is too vague to be useful for Nokia.

Infinera makes Nokia more relevant to AI infrastructure today. NVIDIA makes its longer-term software and mobile strategy more credible. The installed telecom base gives those technologies a path into commercial networks that a semiconductor company could not reproduce quickly on its own.

If its optical technology becomes embedded in a growing number of AI networks, SR Linux earns a role inside accelerated data-center fabrics, and anyRAN turns part of the AirScale installed base into programmable infrastructure, Nokia will have created several reinforcing distribution channels around the same underlying demand. A customer acquired through optical networking could adopt its routing and automation. A mobile operator already using AirScale could purchase accelerated upgrades and software. Research funded by licensing income and Bell Labs could strengthen products across both infrastructure segments.

If Nokia succeeds, the most important result will not be a single quarter of higher optical growth or a successful AI-RAN pilot.

It will be that, almost unnoticed, a company once defined by telecom equipment became part of the infrastructure through which artificial intelligence actually moves.

This is a post by Patrick, an independent market analyst and tech investor posting as TemptInvest on X, specializes in tracking hyperscaler capex, optical networking, and AI infrastructure trends. Link to post

*****

Last night Google $GOOGL raised capex to $205 billion. 40% goes to networking equipment. This morning Nokia $NOK reported €2.8 billion in AI and cloud orders. These two things are not a coincidence. Q1 was €1 billion and I called it the beginning of something real. Q2 came in at nearly three times that. AI and cloud sales more than doubled year over year. Management said they expect roughly half of those orders to convert to revenue over the next twelve months. That’s €1.4 billion in contracted, incoming AI revenue from Q2 alone, before Q3 and Q4 have even started.

The rest of the print. Revenue €4.82 billion, up 8.3% year over year. Network Infrastructure up 12%. Comparable operating profit up 18%. H1 comparable operating profit up 70% year over year. People will focus on the reported operating loss. Don’t. €800 million in restructuring charges are being taken this year to surgically remove every business that isn’t optical networking, IP routing, and AI RAN from the balance sheet. The pain is deliberate. What’s left when it’s done is a pure play AI connectivity infrastructure company.

Now here’s the part I actually want to talk about. We’re entering what Jensen Huang calls the physical AI era. Humanoid robots. Autonomous vehicles. Smart factories. AI systems that don’t just process data in a cloud, they exist in the physical world, making real time decisions, moving real objects, interacting with real environments. Every single one of those systems needs to communicate. With each other. With the cloud. With the humans operating them. At speeds and latencies that current network infrastructure wasn’t designed to handle. Nokia’s AI RAN platform, launched eight days ago, is built specifically for this. A radio access network that thinks in real time. That adapts to traffic patterns autonomously. That can handle the kind of low-latency, high-density connectivity that a factory floor full of robots or a city full of autonomous vehicles will demand. The €2.8 billion in orders today is from hyperscalers building data centers. That market is enormous and still growing.

But the physical AI market, the one that’s just beginning, is a completely different and potentially much larger demand wave coming behind it. Every robot needs a network. Every autonomous vehicle needs a network. Every smart factory needs a network. Nokia is the company building the network architecture that physical AI runs on. And they make their own lasers. While every competitor buys theirs.

The data center wave is happening right now. The physical AI wave is forming behind it. Nokia is positioned for both. The narrative still hasn’t caught up to the order book. I believe it will.

Nokia's AI-related rise is recent, and its stock hasn't multiplied from its 12-month low anywhere near the levels of its AI-infrastructure peers. This late arrival may actually be an advantage in terms of upside potential: while other AI infrastructure companies already get a significant share of their sales from AI demand, Nokia is only beginning to monetize this opportunity.

As Nokia’s AI- and cloud-related order book builds up, the resulting sales and profits will materialize mostly in 2027 and beyond. This delay makes Nokia's P/E ratio for this year appear high on paper, even though both sales and profits are on a highly encouraging trajectory.

Furthermore, during its Q1 earnings call, Nokia reported that the addressable market for its AI & Cloud segment is expanding at a 27% CAGR, meaning it will double every three years. At the same time, many of Nokia's early-mover competitors are increasingly supply-constrained. This capacity bottleneck across the industry paves a clear path for a well-positioned latecomer like Nokia to secure market share and make significant inroads when AI investments still keep growing as per a recent study by Morgan Stanley.

Markets price future earnings, not current earnings. When a company enters a new growth phase, the share price often adjusts before the associated profits appear in reported earnings. That temporarily inflates the P/E ratio.

Conclusion: Nokia was late to the AI party, and its current P/E reflects that transition. As AI-related sales and profits ramp up, the P/E should naturally moderate. My point is that a relatively elevated P/E is not surprising at this stage, given the market's expectation of future earnings growth. Therefore, a share price correction in tandem with more mature AI companies that have appreciated far more is not necessarily warranted, provided Nokia's AI growth story continues to play out.

This is an English translation of a post I wrote on a Finnish investment forum in response to the claim that Nokia's recent rally is simply "hype."

*****

For years, Nokia was essentially a dead stock. Now that it has finally moved to a higher valuation range, many investors immediately dismiss the rally as "hype." I think there's another way to look at it.

Nokia used to be run like a bureaucratic organization rather than a growth company. Growth remained elusive, profitability suffered because of weak mobile network markets, and the company even lost two major U.S. customers (Verizon and AT&T).

Pekka Lundmark wasn't a rainmaker, but he did identify where future growth could come from: Network Infrastructure (especially optical and IP networking), defense, and private wireless networks (although here Nokia later made the decision not to provide campus networks directly to end customers). He also completed the strategically important acquisition of Infinera before handing over to Justin Hotard, whose background is closely aligned with the AI infrastructure cycle.

Already in Q1, Nokia's new AI and Cloud focus area represented only about 8% of revenue (roughly €350 million), but generated approximately €1 billion of orders—almost three times quarterly revenue. If that order pace continues throughout the year, annual orders would reach roughly €4 billion, around 67% above last year's €2.4 billion. Nokia has also stated that its addressable AI and Cloud market is expected to grow at roughly 27% annually, implying a doubling in about three years.

The company is also investing heavily in optical networking:

• Expansion of InP semiconductor manufacturing in San Jose.
• Expansion of advanced optical packaging and testing capacity in Allentown.
• Strong optical demand from hyperscalers benefiting all optical companies.
• IP networking also appears to be entering a stronger growth phase following several significant recent wins.

Of course, if you value Nokia purely on today's reported earnings and revenue, the stock can certainly look expensive. Under that framework, it's easy to call the rally "hype." But is that how rational investors value companies? Or do they attempt to model where the business may be heading over the next several years?

Some developments that I believe deserve attention include:

• Structural growth in AI and cloud infrastructure.
• The Nvidia partnership around AI-RAN.
• Potential growth in defense communications as seen in Ukraine apparently utilizing Nokia's capabilities to penetrate Russia's drone defenses.
• A business mix becoming less dependent on traditional telecom operators as hyperscalers account for a growing share of demand.

Nokia is gradually transforming from a slow-growing telecom equipment company into a broader networking infrastructure company with exposure to several structural growth markets. That transformation won't happen overnight, but it also shouldn't be ignored simply because current financial statements still largely reflect the old Nokia.

I'm not arguing that today's share price is necessarily correct—it could ultimately prove either too high or too low. What I am arguing is that "hype" is too simplistic a description. Markets are forward-looking, and investors are increasingly trying to value what Nokia may become, not just what it was over the past few years.

Nokia's target price hiked to 14 euro ($16) from 10.50 by Kepler Cheuvreux. The recommendation is BUY. Link