Nokia: How a forgotten stock from Finland doubled investors wealth in AI comeback story

For years, Nokia was treated like a company that had already had its moment. Once a symbol of the mobile-phone age, the Finnish group later became a slower telecom equipment stock, tied to carrier spending, 5G cycles and thin investor excitement. In 2026, that view has changed fast. Nokia shares have jumped about 100% this year, helped by a growing belief that the company is no longer just a legacy telecom gear maker.

Investors are now looking at it as an artificial intelligence infrastructure play, with exposure to data centres, optical networks, IP routing and switching equipment used by large cloud companies.

The latest wave of optimism has come from broker upgrades. Bank of America has reiterated its buy rating on Nokia and raised its target price to €15.6 from €14.4, implying more than 44% upside. The bank expects Nokia to again report strong AI-related order intake when it announces second-quarter results on July 23. BofA said investor focus will be on order intake from AI and cloud customers, especially whether hardware orders linked to AI technology remain at least in line with the €1 billion booked in the first quarter.

That view is also supported by a Jefferies report dated June 30, which raised its Nokia price target to €13.8 from €10.7. Jefferies said Nokia’s engagement with hyperscalers is increasing across its optical portfolio, while its IP Networks business is seeing acceleration from switch wins with one hyperscaler. The brokerage expects this order momentum to lead to higher growth and margin expansion in 2027 and 2028.

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The reason behind the shift

AI data centres need more than chips. They need high-speed networks to move huge amounts of data between servers, storage systems and cloud regions. This is where Nokia’s optical transport and IP networking businesses are becoming relevant again. Jefferies said Nokia booked €2.4 billion of cloud and AI orders in 2025 and another €1 billion in the first quarter of 2026, mostly in optical. But revenue from cloud and AI was only €350 million in the first quarter, suggesting a large backlog that can support future sales.

Reuters reported earlier that Nokia’s first-quarter comparable operating profit rose 54% to €281 million, beating market estimates, while AI and cloud customer sales rose 49%. The company also raised its expected AI and cloud market growth to 27% annually for 2025-2028, from an earlier estimate of 16%.

Jefferies now expects Nokia’s cloud and AI revenue across optical and IP to accelerate to 27% growth in 2027, above the company’s current 2026 guidance of 18-20%. It has also lifted its 2027 earnings-per-share forecast by 13% and expects its FY27 EPS estimate to be 15% ahead of consensus. The brokerage sees Nokia’s Network Infrastructure operating margin rising to 16.8% in 2027 from 13.8% in 2026, close to the high end of the company’s 2028 target range.

BofA expects AI-related hardware orders in the second quarter to be at least in line with the first quarter’s €1 billion, helped by recent data-centre switch wins and continued demand for optical transport components. The bank also raised Nokia revenue estimates by 1% to 6% for 2026-2028 and lifted EBIT forecasts by 2% to 12%.

Nokia’s comeback depends on AI capital spending staying strong. If hyperscalers slow data-centre investments, demand for optical and IP products may soften. Jefferies also flags that Nokia still has to prove it can gain share in data centres and avoid falling behind rivals in optics and switching.