Nokia (AO) | Buy | Positive feedback from CFO Tour

Research evidence excerpt

Nokia (AO) | Buy | Positive feedback from CFO Tour

he AI & cloud business, the demand from hyperscalers is picking up, and Nokia confirms a

stronger-than-expected outlook for the coming years and some upside to its medium-term targets provided at the CMD last

November.

While Nokia has materially upgraded its forecasts for 2026 along with its Q1 results, with network infrastructure sales expanding

by 12-14% LFL in 2026E (up from +6-8% previously), with +18-20% LFL around optical/IP networks (up from +10-12% LFL

previously), management has not updated its medium-term targets so far (and specifically its ambitions for 2028). Management

doesn't want to upgrade its medium-term targets on a quarterly basis, and we believe Nokia should finally come up with

upgraded targets in the coming months.

Nokia now expects its addressable market to expand by 8% per year over 2026-28E (up from +5% expected initially), and we

believe Nokia could potentially grow sales in the high-single-digit range in the coming years (assuming solid growth prospects

around optical/IP networks and a gradual return to more normal growth rates in fixed networks following the pruning of its

product portfolio).

Nokia claims high differentiation versus peers in AI & cloud

CFO claims high differentiation versus peers in AI & cloud with strong software capabilities and high-quality products (including

low failure rates, lower cost per bit, and reduced power consumption).

In this perspective, Nokia has launched at the OFC last March its multi-rail in-line amplifier, which is 25% more efficient than

Ciena's latest product (the product is expected to start shipping in H2 2026).

Nokia also has a unique position in optical networks with its vertically integrated manufacturing capabilities, including its own