Nokia, the Technology sector company, was revisited by a Wall Street analyst today. Analyst Terence Tsui from Morgan Stanley upgraded the rating on the stock to a Buy and gave it a €6.50 price target.
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Terence Tsui has given his Buy rating due to a combination of factors that highlight Nokia’s improving growth and earnings profile. He believes Nokia’s strategic shift away from near-total reliance on telecom operators toward AI and cloud customers—supported by the Infinera acquisition—is opening the company to a much faster-growing end market, as hyperscalers are now outspending traditional telcos by a wide margin. In particular, the optical networking and data center switching businesses are seeing very strong order momentum, with rapid year-on-year growth that should support robust near-term revenue and underpin a healthier medium- to long-term outlook. At the same time, previously weaker segments such as mobile networks are starting to show early signs of stabilization following years of restructuring and portfolio simplification, leaving Nokia a leaner and more focused company.
Tsui also argues that the market underestimates Nokia’s earnings potential, with his 2028 EBIT forecast more than 10% above consensus, implying scope for upward revisions and a valuation re-rating. Even after a recent share price rally, he notes that the stock still trades around 9x EBIT, broadly in line with past cycle averages and not yet reflecting the enhanced exposure to data center and AI-driven demand. He sees additional upside catalysts from Nokia’s partnership with NVIDIA, which also holds a 3% equity stake, and from elevated geopolitical support for Western suppliers of critical digital infrastructure in a more fragmented global environment. These combined elements underpin his conviction that the risk-reward profile is attractive enough to justify an Overweight/Buy recommendation on Nokia’s shares.
In another report released on January 13, Jefferies also maintained a Buy rating on the stock with a €7.20 price target.