TLDR
- Rosenblatt initiated Nokia with a Buy rating and a $15 price target, citing its optical networking business as a key AI infrastructure play.
- Nokia’s Optical Networks revenue grew 20% year-over-year in Q2 2026, with AI and Cloud revenue more than doubling.
- AI and Cloud orders hit €2.8 billion in Q2, with roughly half expected to convert within 12 months.
- Nokia and Telxius have partnered to deploy Nokia’s ICE-X 800G coherent pluggable optics across terrestrial networks in Europe, the U.S. and Latin America.
- Rosenblatt models Nokia’s 2028 operating margins above 15%, up from 11.5% in 2026.
Rosenblatt kicked off coverage of Nokia with a Buy rating and a $15 price target on Monday, making the case that the Finnish telecom equipment maker is being undervalued for its growing optical networking business.
Analyst Mike Genovese said Nokia’s Network Infrastructure segment is “quietly becoming one of the best-positioned optical assets in the AI buildout.” That’s a pointed argument given Nokia still trades at a telecom-equipment valuation rather than an AI infrastructure multiple.
Nokia’s ADR (NOK) was trading around $9.65 at the time of publication, down sharply on the day.
Nokia’s Optical Networks revenue grew 20% year-over-year in Q2 2026. AI and Cloud revenue more than doubled in the same period. AI and Cloud orders reached €2.8 billion, with roughly half of that expected to convert to revenue within 12 months.
Optical Networks accounts for about 45% of Nokia’s Network Infrastructure segment and around 20% of total company revenue. Genovese noted Nokia’s trailing twelve-month Optical Networks sales of roughly $4 billion put it roughly in line with Ciena, a recognized leader in the space.
Where Nokia Fits in the AI Data Center Race
Genovese highlighted Nokia’s position in “scale-across” networking, which he described as the hardest of three AI data center fabric types to displace once a supplier is designed in. That kind of customer stickiness matters when sizing up the long-term opportunity.
Rosenblatt estimates the broader Optical DCI market, currently around $12 billion, could grow at a roughly 35% compound annual rate to reach $40 to $50 billion by 2030. The scale-across total addressable market alone is pegged at more than $20 billion by 2030, on top of the existing $20 billion DCI base.
To secure its supply chain, Nokia is investing in three U.S. Indium Phosphide laser facilities, located in San Jose, Pennsylvania, and a new campus in Chandler, Arizona, added through its NXP acquisition.
Rosenblatt’s $15 price target is based on a sum-of-the-parts model that credits one-third of Nokia’s value to AI infrastructure and two-thirds to its traditional telecom business. Genovese called that split “potentially conservative” given expectations the mix will shift further toward AI.
Nokia and Telxius Deploy 800G Optics Across Three Continents
Separately, Nokia announced a partnership with Telxius to deploy its ICE-X 800G coherent pluggable optics across Telxius’ terrestrial transport networks in Europe, the U.S. and Latin America.
The deployment uses IP-over-DWDM technology to handle rising demand from cloud services, AI workloads and data center interconnections. Nokia’s automation tools give Telxius end-to-end network visibility and performance monitoring.
The partnership builds on a recent joint demo over Telxius’ BRUSA subsea cable, where Nokia’s 800G ZR+ technology delivered 400 Gb/s per wavelength over more than 5,600 km.
For Nokia’s other segments, Genovese described Fixed Networks and Mobile Infrastructure as low-single-digit growth businesses being managed for margin improvement, aided by AI-RAN adoption and cost actions including a pullback from China operations. Rosenblatt models 2028 operating margins above 15%, up from 11.5% in 2026.
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