Nokia’s stock nudged higher on Monday after Bank of America upgraded the Finnish telecom equipment maker to Buy, pointing to a growing optical networking business and rising demand from hyperscalers building out AI infrastructure.
BofA analyst Oliver Wong led the upgrade, moving Nokia’s price target from €6.87 to €10.70 — a 56% jump in the target. Nokia’s stock climbed nearly 2% in Helsinki trading by midday GMT.
The bank also switched its valuation method, moving from EV/EBITDA to a sum-of-the-parts model. It applied a 30x multiple on 2027 estimated EBIT for Nokia’s Optical and IP Networks business, and a 10x multiple on the rest of the company.
The 2025 acquisition of Infinera is central to BofA’s thesis. That deal gave Nokia deeper exposure to U.S. cloud customers, and BofA sees it as a turning point in the company’s positioning.
Nokia’s Optical Networks segment is forecast to grow at a 17% compound annual rate through 2028. BofA points to rising optical systems demand and an expected surge in coherent pluggable revenues as the industry moves from 400G to 800G speeds.
Wong’s team described Nokia as “transforming into an optical powerhouse with a European advantage.” They view the company’s own 10–12% growth guidance for Optical and IP Networks as conservative, expecting Nokia to beat and raise it.
On the IP Networks side, BofA sees Nokia picking up ground in European data center switching, helped by a partnership with NScale, a neocloud operator focused on the European market.
The bank estimates Nokia could pull in €226 million in data center switching revenue in 2026, growing to €407 million by 2028.
Mobile Infrastructure remains Nokia’s largest segment by revenue. BofA expects operating margins there to expand from 13.4% in 2025 to 17.8% by 2028, driven by portfolio pruning and a bigger push into software.
Nokia’s partnership with Nvidia adds another layer to the story. Nvidia invested $1 billion in Nokia back in October 2025, with AI-RAN as the target use case. BofA doesn’t model meaningful near-term revenue from the tie-up but flags it as a longer-term positive.
Any replacement of Huawei and ZTE equipment across Europe is not baked into BofA’s base case either — but it represents real upside if regulatory or political winds continue to push European operators away from Chinese vendors.
BofA’s 2026–2028 EPS estimates run 13–15% ahead of Street consensus. That gap suggests the market hasn’t fully priced in Nokia’s optical pivot yet, at least in BofA’s view.
Jefferies also holds a Buy rating on Nokia, with a price target of €8.80, set in a report published on April 8.
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