Nokia has appointed Mikko Viitaniemi as the new Head of Defense, starting September 1st. He joins Nokia from Finnish defense group Patria, where he served as VP of Commercial and Business Development for Defense and Weapon Systems.

In a LinkedIn post, Viitaniemi said:

>For over 20 years, I have been deeply involved in building and internationalizing the domestic defense industry—first at Bittium and most recently over the past seven years at Patria. Now, it is time to step into the next boots and take on a new challenge. On September 1st, I will join Nokia as Head of Defense. > >I am making this move because I see this role as the most compelling opportunity in the entire defense sector today, especially here in Finland. While I have had the privilege of driving significant growth in my previous roles, Nokia leadership's strong mandate and clear vision make this upcoming chapter uniquely exciting. > >Thank you for the trust, Justin and Mikko! I truly look forward to joining this exceptional new community and driving our global defense business forward.

Nvidia is believed to be working on a “massive” project that could create a new, very high capacity long-haul telecom project, Needham Securities said. And with the cost likely between $5B and $10B over three years, Ciena, Cisco and several others may benefit, the investment firm said.

“While we are not certain of their rationale, we suspect NVDA seeks to reduce its dependence on the big 4 hyperscalers who dominate global hosting and LH interconnect capacity by building direct connectivity and hosting for its strategic neocloud partners and future enterprise customers,” Needham analyst Ryan Koontz wrote in a note to clients. “Among beneficiaries of this unannounced program, we have identified CIEN, CSCO, NOK, GLW, Zayo, and Lumen as likely contract awardees.”

Delving deeper, Koontz said he believes Ciena could see an incremental $500M to $800M in sales from the project over the next two or three years, while Cisco and Nokia see less. And with Ciena shares having pulled back, Koontz said he is “more bullish” on the stock and sees a “clear path to accelerating revenues as industry supply chains steadily expand.” He has a Buy rating and $600 price target on Ciena.

Aside from Ciena, the checks also show that the network has “dozens” of fiber pairs that can be used to deliver more than 5 petabytes worth of data, with Corning, Ciena, Nokia, Zayo and Lumen benefiting.

Corning is expected to be the prime fiber supplier with all U.S. deployments, with Zayo and Lumen building via the Managed Optical Fiber Network model.

Nvidia did not immediately respond to a request for comment from Seeking Alpha.

Some investors fear a profit warning. Others hope for a positive one. This is what Nokia said in its Q1 report:

>For the full year, we now expect Network Infrastructure net sales to grow between 12% and 14% in 2026. We expect Optical Networks and IP Networks combined to grow between 18% and 20%. We are also increasing our investment in Optical Networks to maximize our opportunity in this accelerating market. As a result we are currently tracking somewhat above the mid-point of our full year financial outlook of EUR 2.0 to 2.5 billion in comparable operating profit.

The way I see it, other things equal, the more Nokia invests in production capacity today, the lower free cash flow will be in the short term, but the greater the profit potential in future years. 2026 is when Nokia is laying the foundation for growth over the next several years. For instance, capital expenditures were €606M last year, while guidance for 2026 is €900M to €1B.

To me, the most interesting relevant metric to watch this year is AI and cloud-related order intake, not necessarily current sales or earnings. Sales and profits are still on the acceleration ramp, while orders provide a clearer indication of future sales.

Speculating about whether Nokia will issue a positive or negative profit warning may be entertaining, but it misses the bigger picture. 2026 is shaping up to be a year of significant growth investments, and the long-term implications of those investments matter far more than a modest earnings beat or miss.

Nokia today announced that it has been selected by Symphony Communication Public Company Limited (SYMPHONY) to upgrade the Malaysia-Cambodia-Thailand (MCT) subsea cable system with its industry-leading optical solutions. As part of the initiative, legacy equipment will be replaced with Nokia’s Submarine Line Terminal Equipment (SLTE), powered by its sixth-generation Photonic Service Engines (PSE-6) coherent optics.

Once completed, the initiative will enable up to 30 Tbps of capacity per fiber pair, three times that of legacy systems, and will deliver low-latency connectivity between Thailand, Malaysia and Singapore. This will support advanced, real-time use cases such as Artificial Intelligence (AI) inference, cloud bursting and mission-critical enterprise applications. The upgrade also supports the sustainability goals of the subsea network operators by reducing the carbon footprint through improving power efficiency.

The MCT cable is the only subsea system landing in Rayong in Thailand’s EEC, the country’s primary hub for AI-driven data center investment. Thailand is rapidly emerging as a regional digital infrastructure hub, attracting more than USD23 billion in data center investment across 36 projects, according to Thailand’s Board of Investment (BOI) data.

This growth is attracting several global hyperscalers seeking trusted, high-capacity connectivity routes. The upgraded MCT cable provides a critical, low-latency and sovereign connectivity, addressing the region’s growing demand for secure, high-performance subsea infrastructure.

>We are pleased to expand our longstanding partnership with SYMPHONY from terrestrial and cross-border networks into the subsea domain. This upgrade will help deliver advanced, trusted connectivity across Southeast Asia and support Thailand’s ambition to become a regional hub for AI and cloud-driven digital services.

Ajay Sharma, Country Manager of Thailand at Nokia

>The MCT upgrade underscores our commitment to continuously improve network performance to provide the best-in-class experience to our customers. With Nokia’s submarine network solution, we will deliver unmatched capacity and reliability and become the connectivity partner of choice for hyperscalers and enterprises, building next-generation digital infrastructure hub in Southeast Asia.

Alex Loh, Chief Executive Officer of Symphony Communication Public Company Limited

Nokia’s PSE-6 solution uses advanced 5nm DSP technology and intelligent signal optimization to deliver higher capacity, better efficiency and long-term scalability. It enables a direct, high-capacity and low-latency connectivity route for enterprises, OTT players and AI and cloud providers, while reducing network power consumption by 60%. The deployment is further supported by Nokia’s WaveSuite optical network automation platform. The solution will enable a single pane of glass improved multilayer network visibility along with support for cross-domain automation to achieve sustainable energy optimization, lifecycle operations, and network resiliency in their high-performance end-to-end connectivity.

Source: Nokia media release

Nokia expands Pennsylvania chip facility 10x

Nokia announced an expansion of its advanced test and packaging (ATP) operations in Allentown, Pennsylvania, with approximately $30 million in total investment, which includes about $4 million in state assistance and approximately $10 million in federal CHIPS Act investment tax credits.

The Allentown facility, one of a small number of U.S. sites producing ATP of photonic chips into optical modules, will increase production capacity by up to 10 times its current level. New capacity is expected to be commercially available by the end of the third quarter of 2026.

Nokia said the expansion is expected to nearly double its Pennsylvania workforce to more than 500 jobs in engineering, manufacturing, and research and development, with a projected economic impact of more than $500 million over the next five years.

According to the press release, less than 2% of global semiconductor ATP currently takes place in the U.S. Nokia's optical technologies are used in telecom networks supporting AI infrastructure and, the company claims, can reduce energy usage by as much as 75%.

"Our expansion in Allentown is a direct investment in that future—scaling domestic manufacturing of the optical networking technologies that power AI infrastructure," said Justin Hotard, President and CEO of Nokia.

The Department of Commerce's Bill Frauenhofer noted the project is supported by CHIPS and Science Act funding and said it "strengthens America's semiconductor supply chain."

The Allentown expansion is part of Nokia's previously announced multi-year plan to invest $4 billion in U.S. research, development, and manufacturing focused on AI-ready network connectivity.

Video link to the inauguration event.

*****

COMMENT: Now we have the San José InP chip fab which goes online at the end of this year and will increase capacity 20x and this Pennsylvania packaging and testing facility with 10x capacity. Let's remember that Justin Hotard has said production capacity is currently the limit, not demand.

Nokia is scaling up in a very significant way. When management says capacity is the constraint and then invests heavily to lessen that constraint, it's a big deal.

JPMorgan upgrade

JPMorgan raised its price target on Nokia OYJ (NYSE:NOK) shares to EUR18.00 ($21) from EUR12.00 on Thursday while maintaining an Overweight rating. 

The firm increased its sales estimates for the company in 2026, 2027, and 2028 by 1.7%, 5.2%, and 10.2% respectively compared to earlier expectations. The new projections stand 0.2%, 2.9%, and 7.7% ahead of current Infront consensus expectations.

JPMorgan’s new EBIT estimates for 2026, 2027, and 2028 are 1.8%, 6.0%, and 40.1% ahead of Infront consensus. The firm said consensus is not factoring in new revenue in the AI and cloud business and the operational gearing associated with higher revenue.

The firm’s 2028 EBIT estimate for Nokia is 58% ahead of the mid-point of the company’s November 2025 guidance of EUR2.7 billion to EUR3.2 billion. JPMorgan said the strength of the optical market was not anticipated in November and the company had not obtained new switch design wins at that time.

JPMorgan values Nokia at 29 times price-to-earnings based on a price-to-earnings-growth ratio of 1. The firm cited Nokia’s revenue potential in optical and IP networks businesses and margin potential from optimization and restructuring in mobile infrastructure.

CFRA upgrade

This already took place June 3:

We maintain our Buy rating and raise our 12-month target price to USD22 (from USD16). Our target price is based on a 2027 P/Sales multiple of 4.65x, representing 0.5 standard deviation above the five-year average of listed Optical Network peers (including Ciena, Coherent, and Lumentum) of 3.25x. The premium reflects Nokia's growing exposure to Optical Networks, which we believe should benefit from rising AI-driven data center interconnect and cloud networking demand. We maintain our revenue forecasts of EUR21.5B (+8% Y/Y) in 2026 and EUR23.3B (+8% Y/Y) in 2027, reflecting continued growth in AI-related networking demand, expanding cloud and data center investments, and a gradual recovery in telecom spending. We keep our EPADS estimates at EUR0.32 (+10% Y/Y) in 2026 and EUR0.39 (+22% Y/Y) in 2027, supported by a richer business mix, increasing contribution from higher-margin infrastructure businesses, operating leverage from revenue growth, and continued cost discipline.

Helsinki, Finland – June 9, 2026

ICEYE, the world leader in sovereign intelligence from space, has raised EUR 450 million (USD 520 million) in a primary Series F funding round led by General Atlantic, at a valuation of over EUR 10 billion (USD 12 billion). 

Additional investors include Solidium, Tesi, Varma, Ilmarinen, Lifeline Ventures, as well as Nokia, from Finland, Qatar Investment Authority (QIA) and TCV. Together with a secondary placement, the total Series F funding round exceeds EUR 1 billion.
 
The breadth of the investor group signals recognition that sovereign and commercial access to space-based intelligence is essential to national security and resilience worldwide.   

Seven governments to date across Europe have procured sovereign satellite systems from ICEYE, making it the leading  provider of space-based intelligence. Proceeds from the funding round will drive the expansion of ICEYE’s global footprint and deepen its intelligence capabilities, positioning the company to meet growing demand and deliver sovereign intelligence systems and data to governments and customers at a new scale. 

About ICEYE

ICEYE is the world leader in sovereign intelligence from space. We deliver persistent monitoring capabilities to detect and respond to changes in any location on Earth.

ICEYE owns the world's largest and most advanced SAR (synthetic aperture radar) satellite constellation. To our customers we provide intelligence with unmatched quality, latency and revisit times, in any weather, day or night. To governments who choose to operate their own constellation we provide this proven capability as a sovereign system.

ICEYE-built constellations serve customers in defence and intelligence, environmental monitoring, insurance and emergency management. We enable fast decisions that contribute to a safer future.

Founded and headquartered in Finland, ICEYE operates globally with over 1,000 employees across Poland, Spain, the UK, Australia, Japan, the UAE, Greece, and the US.

Should order intake be larger due to the San José InP fab coming online in late 2026?

First of all, a multi-fold increase in factory capacity and revenue growth are not the same thing. The approximately 20-fold capacity expansion at the San José chip fab relates to indium phosphide (InP) component manufacturing capacity, not to Nokia's revenue or order book automatically growing 20-fold. The component increase will other supplies permitting allow Nokia to increase its optical output.

Demand seems currently not to be a limiting factor for sales expansion. Nokia reported approximately 1 billion euros in AI & Cloud orders in Q1, while the segment's revenue was around 350 million euros. This means a book-to-bill ratio of nearly 3, meaning the order book is growing significantly faster than deliveries. Furthermore, according to Hotard, lead times on the optical side are typically 12 to 18 months, and orders already extend into 2027. At the JPMorgan conference, he also noted that if there were more supply, Nokia would likely be able to deliver more right now. According to him, the bottleneck increasingly appears to be in supply rather than demand.

If the Q1 order pace were to continue at the same level for a long time and the orders converted into deliveries roughly on the current schedule, AI & Cloud's share of Nokia's revenue could rise roughly to a level of just under 20 percent from Q1's 7.8 percent. Next year, as optical capacity grows, there may also be a step-change increase in orders. Note also that Nokia's orders are binding, not vague “reservations,” which Hotard clarified during the Q1 analyst call:

“Just to clarify, we have actually across the business, including with our telco customers, we have multi-year frame agreements, and sometimes we announce some of those. The only thing you see in orders is firm purchase orders with delivery dates.”

The essential point now is that Nokia has already secured significantly new AI and cloud orders, raised its growth assumptions, and is investing heavily in its own optical production capacity at the same time that Ciena reports a growing 7.7 billion dollar backlog and states that demand still exceeds supply. The most significant question is no longer whether demand exists, but how quickly Nokia can scale production and convert that demand into deliveries and earnings.

Stagnant 2028 operational profit targets vs. market strength

For the time being at least, Nokia does not seem willing to update its 2028 figures, presented at CMD in November 2025, at the same pace as its short-term outlook. The 2026 figures were raised because they represent the current year’s “outlook,” i.e., guidance, whereas for 2028, they are “targets.”

However, following the Capital Markets Day, guidance and market expectations were significantly raised in connection with the Q1 report:

• Network Infrastructure (NI) growth: 6–8% → 12–14%
• Optical Networks + IP: 10–12% → 18–20%
• Hyperscaler CapEx (2026): 540bn → 700bn
• AI & Cloud market annual growth rate (CAGR 2025–2028): 16% → 27%

In light of this and, for example, signs received from Ciena, is it reasonable to assume that the 2028 targets are still the base case scenario? For instance, Nordea Bank estimates the 2028 operating profit to be 3.54bn. That is clearly above Nokia's own guidance range and above consensus, suggesting the investment community is beginning to price in guidance conservatism even before Nokia updates its targets. Given the drastically upgraded growth forecasts, the un-updated CMD targets seem overly conservative, unless Hotard foresees a larger-than-previously-assumed investment need continuing into 2028 to exploit the AI super-cycle. For example, the capital expenditure guidance for this year was raised sharply from last year: 900–1000 million this year, compared to a guidance of 650 million last year. Presumably, this year's high figure is primarily linked to the ramp-up of the San José chip fab.

To explain why the 2028 targets haven't been updated, Justin Hotard said this in the Q1 analyst conference call:

I think first of all, in terms of guidance or assumptions that we outlined, we set a set of those assumptions out in -- for CMD through '28. Fundamentally, those will hold, those were at the NI level, and we provided some visibility to IP and optical growth underneath that. So those continue to hold, obviously, as we talked about, we're not going to update those every quarter, but we'll give you visibility into what we see going into next year and provide an update on it from that perspective. And we gave you an update, obviously, on what we see this year versus expectations.

Conclusions

By front-loading investments to scale internal component production, Nokia is building the infrastructure to raise its growth rate and to turn its growing orders into sales. This being so, traditional valuation models may not adequately capture Nokia’s substantial inflection point because they rely either on current sales and profitability or un-updated long-term targets rather than dynamic operational data.

Slightly abbreviated Light Reading article from June 3 centered on Ciena's Q2 (non-calendar-year quarters) where Ciena's revenue grew 39.5% to $1.57 billion, up from $1.13 billion. Due to overlapping optical activities, this article is also highly Nokia-relevant.

*****

Ciena once again reported growing revenue and earnings amid the ongoing AI network spending spree, with CSO David Rothenstein telling Light Reading that the current boom is unlikely to end anytime soon, and agentic AI could amplify current trends.

After several successive quarters of growth, Ciena is confident that the trends driving its rising revenues and earnings are not going to end any time soon. In fact, the company's CEO Gary Smith said on today's earnings call that he expects Ciena's addressable market will double to $50 billion by 2029.

"This is more of an AI investment era, where there's a set of demand drivers that are unlike anything we've seen before," Ciena's chief strategy officer, David Rothenstein, told Light Reading. "It really is rooted in AI and what AI is going to portend, and we're at the very early stages right now when we're talking about generative AI."

In 2026 alone, hyperscalers and neoscalers are expected to spend "something in the order of $1 trillion" on capex, according to Rothenstein.

Agentic AI on the horizon

"We haven't really begun to scratch the surface of agentic AI and autonomous networking, which is, which is going to come," Rothenstein said, adding that this translates to a multiyear investment era.

Rothenstein said agentic AI may amplify current trends, with millions of agents being targeted to communicate and take actions.

"All of those agents have to be connected, and the amount of data that will be generated and moved, the amount of bandwidth that they will require in the data center and in the wide area network, this is a potential force multiplier effect on all of the existing dynamics," he said.

Bottlenecks in data center construction increase the importance of networks

Meanwhile, the existing data center buildout continues to face constraints from energy and space availability, with implications for connectivity needs. During the earnings call, Smith announced that Ciena secured the first hyperscaler order for its multi-rail solution RLS Hyper Rail, designed to provide high-capacity, long-distance connectivity.

And the need for high-capacity long-distance connectivity with improved space and power specs isn't limited to hyperscalers. "All that data that's being generated has to move to be monetized, and it has to move into the wide area network," Rothenstein said.

Neoscalers need infrastructure

Hyperscaler connectivity spending isn't the only driver here. Neoscalers will also increase their spending, according to Rothenstein, because "they are not going to be comfortable over the long term, leaving their destiny in the control of hyperscalers," and will want to build their own network infrastructure. The term neoscalers gets applied to a broad category of companies, which he described as spanning enterprise and cloud service providers, to AI firms like Anthropic or OpenAI.

Meanwhile, service providers are also continuing to invest following what Smith described as a period of underinvestment in fixed networks.

*****

COMMENT

Ciena's results suggest that AI networking demand continues to grow faster than industry capacity. The company expects its backlog to keep growing through 2026 (from the current $7.7B) and stated that customers would take more product immediately if it were available. If demand remains as strong as Ciena suggests, and as reflected in Nokia's 27% AI & Cloud market CAGR forecast through 2028, Nokia's challenge may increasingly become less about finding customers and more about scaling production and executing successfully.

Nokia is expanding its optical manufacturing capabilities. The new San José optical fab, expected to begin production later this year, is projected to increase InP production capacity by around 20x over time. A new family of 2nm-based modular DSPs is scheduled to begin rolling out in 2027, broadening Nokia's portfolio and strengthening its position in hyperscaler and AI networking markets.

Ciena's Q2 results don't look like a market where optical demand is fading.

Some highlights:

• Q2 revenue up 40% YoY
• Direct cloud provider revenue up 70% YoY
• Hyperscalers now account for 46% of total revenue
• Management said demand continues to exceed supply

The interesting part for Nokia investors is that Ciena's relatively modest H2 growth guidance appears to be constrained more by manufacturing and supply-chain capacity than by end-market demand. Ciena entered the quarter with a backlog of roughly $7 billion and continues to report very strong AI-related demand.

This matters because Nokia's position is different after the Infinera acquisition. Unlike Ciena, Nokia now owns Infinera's InP (indium phosphide) optical chip technology and manufacturing capability, giving it greater vertical integration in a market where supply appears to be the bottleneck. Nokia has also discussed plans to aggressively scale this internal InP production capacity up to 20-fold in the San José chip fab slated to open towards the end of this year.

If the industry's main challenge shifts from finding customers to producing enough optical components, a vertically integrated vendor like Nokia could gain a substantial advantage.

My biggest takeaway from Ciena's report wasn't the exact growth guidance. It was the confirmation that AI-driven optical networking demand remains extremely strong, hyperscalers are becoming an ever-larger customer group, and supply constraints are massively limiting sales. That's supportive not only for Nokia's Optical Networks business, but also for its emerging hyperscaler IP routing opportunity, where recent design wins are expected to begin contributing to orders this year.

Ciena will probably present an outstanding report, what else can be expected with an order book of $7B? However, Ciena's capacity is already in full use with orders going straight to 2027 or beyond. Thus in a way at least for 2026 Ciena no longer is competing with Nokia as it cannot sell more than it can produce. In other words a great Ciena report is a validation of the massive tailwind feeding both players.

Justin Hotard recently said demand is not the constraint anymore, supply is. His wording was that if Nokia had more supply available, they could likely fulfill additional demand already today.

JP Insights apparently referring to the June 1 media Q&A at the Computex 2026 event in Taipei, Taiwan:

$NOK did you hear that Jensen mentioned Nokia directly during his Q&A? His argument was that the base station today is mostly dumb, and that it should eventually get smart enough to adjust beams, signals, traffic and workloads on the fly, which would lift spectral efficiency and cut energy use. Then he added that $NVDA has a big partnership with Nokia to do exactly that.

Interesting times.

NOKIA: STRONG GROWTH ENVIRONMENT, EXPECTED TO EXCEED 2028 TARGETS – NORDEA

Growing demand for AI computing power and high-performance networking connectivity is benefiting Nokia in several ways, Nordea states in a new analysis.

"Against the backdrop of this exceptionally strong growth environment, we believe Nokia's target of adjusted operating profit of €2.7–3.2 billion in 2028 is increasingly conservative," the bank writes. Nordea's own estimate is an adjusted operating profit of €3.54 billion in 2028, corresponding to an average annual earnings growth rate of 20% from 2025 levels.

Growth in Nokia's Optical Networks business has already accelerated into double-digit territory, driven by 800G optical modules used to connect data centers. The bank also sees further opportunities emerging inside data centers from 2027 onward, as optical solutions gradually replace copper-based connections.

Furthermore, Nordea believes that recently won design contracts with hyperscale cloud operators in IP Networks demonstrate that Nokia is now seriously establishing itself as a credible competitor to Arista Networks and Cisco Systems in data center switching.

"Sales in this area could almost triple during 2026, which is expected to contribute to accelerating growth already in the second quarter," the bank writes.

Nordea also believes that AI-RAN could become a potential driver of market share gains and improved gross margins in Nokia's Radio Networks business from 2028 onward.

"In addition to accelerating organic growth, performance is expected to be driven by synergies from the Infinera acquisition, further cost savings, a more profitable product mix, and the divestment of less attractive businesses," the analysis states.

Nordea has raised its target price for Nokia to €15.70 (appr. $18.24) from €10.50 and reiterates its Buy recommendation, as previously reported by Nyhetsbyrån Direkt.

"Following our thematic data center report, recent increases in 2026 capital expenditure budgets by Alphabet and Meta Platforms, and several positive signals from industry peers during earnings season (including Cisco Systems, Lumentum Holdings, Arista Networks, and Hewlett Packard Enterprise), we are raising our adjusted EBIT forecast for Nokia by 2% for 2026 and by 5–6% for 2027–2028," the bank writes.

Nordea's earnings estimates for Nokia are 4–6% above consensus according to Infront for the period 2026–2028.

"We also see potential for upward revisions to the company's own guidance for both 2026 and 2028, which should continue to support the stock despite the recent re-rating," the bank concludes.

Source: Direkt-SE (in Swedish)