Nokia’s Remarkable AI Comeback: How a Once-Forgotten Finnish Stock Doubled Investors’ Wealth!
Nokia has experienced a significant turnaround in investor sentiment, with shares skyrocketing approximately 100% in 2026, reflecting a shift from its legacy perception as a telecom equipment manufacturer to a promising player in the artificial intelligence (AI) infrastructure space. This transformation has garnered attention due to Nokia’s evolving exposure to data centers and advanced networking technologies. The company’s recent upgrades from brokerages, including Bank of America and Jefferies, indicate strong confidence in its future growth potential, with Bank of America raising its target price to €15.6—a projection suggesting over 44% upside from current valuations.
A key driver of this renewed optimism is Nokia’s robust order intake related to AI and cloud services, with initial projections indicating that hardware orders for AI technology could match the €1 billion secured in Q1 2026. Jefferies corroborated this outlook, citing increased engagement with hyperscalers within Nokia’s optical portfolio, positioning the company favorably for growth in 2027 and beyond. The firm’s positive update highlights a structural shift in the market demand for high-speed networks necessary for AI-driven data centers, resulting in notable booking figures—€2.4 billion in cloud and AI orders in 2025 and €1 billion in Q1 2026—versus a relatively modest revenue of €350 million from this segment in the same timeframe.
Further solidifying the bullish sentiment, analysts are anticipating a ramp-up in revenue growth rates, with Jefferies forecasting an acceleration to 27% growth in cloud and AI revenue by 2027—exceeding Nokia’s initial guidance. With operating margins within its Network Infrastructure segment projected to elevate from 13.8% in 2026 to a target of 16.8% by 2027, there is an expectation for enhanced profitability that reinforces investor confidence. Bank of America also raised revenue estimates for Nokia by up to 6% for the 2026-2028 period, reflecting an anticipated continued uptick in demand for optical transport components and data-center switch wins.
However, risks persist as Nokia’s resurgence hinges on sustained capital spending by hyperscalers in the data center space. Should demand for optical and IP products weaken, especially if competitive pressures escalate, Nokia could face challenges in maintaining its market position. As such, while the outlook remains promising, vigilance is warranted regarding the company’s ability to capture market share in the rapidly evolving AI infrastructure landscape amid increasing competition.
Source: The Economic Times
(Expert Note: This report was prepared by the Wealthova team.)