Blowout order intake accelerates mix shift to AI; Raise PO

Research evidence excerpt

Blowout order intake accelerates mix shift to AI; Raise PO

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Nokia

Blowout order intake accelerates mix shift

to AI; Raise PO

Reiterate Rating: BUY | PO: 16.00 EUR | Price: 8.70 EUR

AI order run rate potentially doubling; Inc. PO to €16/$18.5 23 July 2026

Nokia reported Q2 earnings with a Q3 guide that was slightly soft versus css, but with a Equity

€2.8bn AI order intake that significantly exceeded expectations. We believe market

concerns on the lack of FY guide raise are misplaced, given that most of this quarter’s

Key Changesorder intake will be delivered in 2027E and partly in 2028E, because of industry-wide

capacity constraints. Given that the majority of the €2.8bn in AI orders are for Optical, (EUR) Previous Current

and given continued switch orders expected going forward, we believe Nokia’s AI order Price Obj. 15.60 16.00

run rate has now effectively doubled from ~€1bn/qtr to ~€2bn/qtr. We see AI-related 2026E Rev (m) 21,110.4 20,801.6

revenue potentially doubling in 2027E to account for over 20% of total revenue mix, 2027E Rev (m) 22,956.6 23,267.3

which would accelerate earnings growth and multiple rerating closer to AI-focused 2028E Rev (m) 24,278.6 24,832.2

networking peers. We slightly lower our FY26E revenue/EBITDA estimates on capacity 2026E EPS 0.39 0.37

constraints and raise FY27-28E revenue by 1-3% and EBITDA by 4-8%. We raise our PO 2028E EPS 0.52 0.54

from €15.6/$18.0 to €16/$18.5 on our SOTP valuation, enclosed in the report. Reiterate

Buy. Oliver Wong >>

Research Analyst

MLI (UK)

+44 20 7995 9014Likes: Optical, Switches, AI-RAN oliver.wong2@bofa.com

(A) Optical comprised the majority of Nokia’s AI order intake, indicating strong Didier Scemama >>

sequential growth from Q1. Nokia cited demand for both scale-across and regular DCI.