Nokia Oyj: In the AI sweet spot

研报英文原文证据摘录

Nokia Oyj: In the AI sweet spot

Idea

framework

** = Based on consensus methodologyMDespite having to raise opex and capex to drive the new growth in optical, 2026

§ = Consensus data is provided by Refinitiv Estimates

EBIT guidance was refined by management at the Q1 results to be "somewhat e = Morgan Stanley Research estimates

higher" than the mid-point of the range set at the start of the year. With revenue

growth >20% YoY, we see scope for operating leverage ramping up from H2 and

into 2027 with upside to the 2028 EBIT guidance (MSe 10% ahead of consensus).

(iv) Hyperscaler deals to come? Nokia says it has lower exposure to hyperscalers

than peers. We still await any potential deal partnerships and / or updates on the

NVIDIA announcement to collaborate on AI networking solutions. (iv) Technical

buying support? We think Nokia could be a candidate for entry to the Euro Stoxx

50 when the next review takes place in September as its market cap is currently

higher than several existing members.

Raised forecasts and price target: Nokia's revenues from AI & Cloud in 2025 were

just €1.1bn in 2025, which is much lower than peers. Therefore, potential new orders

can have an outsized effect on the absolute revenue figure and the rate of change

can be significant, especially when starting off a low base. Based on strong market

demand, we raise our estimates again. Our new forecasts sit at the top-end of

revenue guidance for the optical + IP networks unit (21% vs 18-20%) and our 2028

EBIT is €3.65bn, compared to the top-end of the guidance range at €3.2bn. Overall,

our 2028 revenues, EBIT and EPS estimates rise by 4%, 6% and 7% respectively.

However, our price target increases by more at 27% to €14/ share with similar moves

in our bear and bull cases.