Key Takeaways
- Morgan Stanley elevated Nokia’s price target to €8.50 from €6.50 while maintaining an Overweight rating—the highest target on Wall Street
- The bullish call centers on accelerating investment in AI infrastructure and cloud networking, especially optical and IP solutions
- While AI/cloud-related revenue represents approximately 6% of Nokia’s total sales, the segment is expanding rapidly with projected growth of ~13% in 2026
- Recent analyst downgrades from DNB Carnegie and Danske Bank, combined with Nokia’s reduced 2026 profit forecast, had previously pressured shares
- Nokia’s ADR (NOK) traded around $7.90 Tuesday, while the Helsinki-listed shares have climbed approximately 24% year-to-date
Nokia, the telecommunications infrastructure giant based in Finland, received a significant boost this week when Morgan Stanley designated the company as a top investment choice and established a new Wall Street-leading price objective.
The investment bank increased its price target to €8.50 from €6.50 while reaffirming its Overweight recommendation. According to Bloomberg data, this valuation exceeds all other sell-side analysts tracking the stock.
The upgrade comes on the heels of impressive quarterly results from Ciena, a competitor in optical networking, which demonstrated robust cloud-driven revenue expansion. Morgan Stanley believes these figures validate the thesis that Nokia’s own projections for its Optical and IP business unit may be understated.
Nokia has projected 10% to 12% revenue expansion for that division. Morgan Stanley anticipates approximately 13% growth, with optical networking revenues specifically expected to surge over 20%, driven primarily by hyperscale cloud providers building out data center infrastructure.
The shares have experienced considerable swings recently. Nokia’s Helsinki-traded stock jumped more than 12% in the previous week and has soared over 37% during the past month—creating an environment ripe for some shareholder profit-taking. The stock retreated roughly 5% midweek following a decline below its 5-day moving average.
The American Depositary Receipt on the New York Stock Exchange closed near $7.90 on Tuesday, gaining 1.28% for the session. Meanwhile, the Helsinki-listed shares traded at €6.83 on Wednesday, reflecting a year-to-date gain of approximately 24%.
Bearish Analysts Create Conflicting Signals
The investment community isn’t uniformly optimistic. DNB Carnegie downgraded Nokia from buy to hold on March 10, establishing a $6.50 price objective. Danske Bank implemented a comparable downgrade in late February, also targeting $6.50.
These downgrades, along with Nokia’s announcement lowering its 2026 profitability outlook during its Q4 earnings release, have maintained a cautious tone among certain investors—despite the company marginally exceeding earnings forecasts.
For the fourth quarter, Nokia reported adjusted operating profit of €435 million against net sales of €4.83 billion, representing 12% year-over-year revenue growth. However, profitability declined approximately 10% compared to the same period a year earlier.
The mobile networks division continues to face headwinds, with radio access network capital expenditure remaining subdued and mobile segment revenue falling roughly 2% year-over-year in the most recent quarter.
Artificial Intelligence and Cloud Computing Power the Thesis
Nokia’s AI and cloud-focused business currently constitutes a modest portion of total revenue—approximately 6%—but the segment is expanding rapidly and helping compensate for weaker spending from traditional telecommunications carriers.
Morgan Stanley increased its valuation multiple from 10× to 14× projected operating profit, highlighting Nokia’s expanding presence in data center connectivity markets.
Nokia currently provides networking infrastructure to Microsoft Azure and collaborates with NVIDIA on AI networking solutions. NVIDIA maintains a 2.9% equity stake in the Finnish company.
The investment bank identified the Optical Fiber Communication Conference, scheduled for March 15 to 19, as a significant near-term catalyst. The event could yield announcements regarding Nokia’s optical networking roadmap and potentially new hyperscale customer wins.
Moody’s confirmed Nokia’s Ba1 credit rating in December while upgrading its outlook to positive, referencing anticipated profitability improvements spanning 2026 through 2028. Nokia concluded September 2025 with approximately €6.1 billion in cash reserves and committed credit lines.
The broader analyst consensus leans cautiously optimistic. MarketBeat data from early January indicated a “Moderate Buy” rating with 8 buy recommendations, 3 holds, and 1 sell across 12 analysts. The average 12-month ADR price target stood around $6.10, though certain models place it closer to $7.36, with the high-end projection now reaching $8.50—established by Morgan Stanley.
