Putting Numbers Behind The Nokia Thesis

Gaetano · Gaetano · July 01, 2026 at 16:08 · ⏱ 1 min read  | Read on Substack ↗
Summary
The author argues that AI buildout will drive sustained, above-normal demand for optical and IP networking infrastructure, making Nokia's growth trajectory much higher than consensus models imply. This means Nokia is undervalued relative to its long-term opportunity, with strong Q1 orders and raised guidance supporting the thesis.
  • Handelsbanken downgraded Nokia to Hold with a €12 target (from €10.20), while Jefferies maintained Buy with a €13.80 target (from €10.70), framing the valuation debate.
  • Nokia's Optical Networks generated €3.2B and IP Networks €2.6B in 2025, totaling €5.8B; Q1 saw AI/Cloud orders of €1B and Optical growth of 20%.
  • Management raised 2026 growth assumption for Optical plus IP from 10-12% to 18-20%, implying revenue of €6.8-7.0B this year.
  • The author previously modeled €8-9B by 2028 but now believes that target is too low given accelerating AI data center demand for fiber and network infrastructure.
Read time 1 min
Length 1,967 chars
Category finance
Ideas
Gaetano Substack author, Gaetano
The article presents a bullish thesis for Nokia's Optical and IP businesses driven by AI data center buildout, citing strong Q1 orders (€1B AI/Cloud), raised growth guidance (18-20% vs prior 10-12%),
The article presents a bullish thesis for Nokia's Optical and IP businesses driven by AI data center buildout, citing strong Q1 orders (€1B AI/Cloud), raised growth guidance (18-20% vs prior 10-12%), and author's view that consensus is too conservative. However, no personal position or explicit recommendation is disclosed. Risk: The thesis depends on sustained AI infrastructure spending; if AI capex slows or competition intensifies, growth could disappoint. Stock has already run, as noted by Handelsbanken's valuation call.
More from Gaetano

This newsletter, published July 01, 2026, features Gaetano discussing NOK. 1 trade idea extracted by AI with direction and confidence scoring.

Speakers: Gaetano  · Tickers: NOK