Nokia’s Strategic Partnership with NVIDIA: Long-Term Potential Amidst Near-Term Constraints

In a report released today, Didier Scemama from Bank of America Securities reiterated a Hold rating on Nokia, with a price target of €6.96.

Didier Scemama has given his Hold rating due to a combination of factors surrounding Nokia’s recent strategic developments and market conditions. The partnership with NVIDIA, which includes a $1 billion investment, is seen as a strategic inflection point for Nokia, enhancing its position in AI-native data center switching. This partnership is expected to strengthen Nokia’s exposure to AI infrastructure, but the benefits are anticipated to materialize only in the long term, with revenue expected to start flowing in 2027.
Despite the positive strategic implications, Scemama maintains a Hold rating because the partnership is not exclusive, which could limit Nokia’s ability to fully capitalize on potential long-term gains. Additionally, while the AI-RAN product could drive a base station upgrade cycle, current capital expenditure constraints among operators may hinder immediate adoption. Therefore, while the strategic partnership is viewed positively, the near-term financial impact is limited, justifying the Hold rating.

In another report released yesterday, UBS also maintained a Hold rating on the stock with a €5.40 price target.