Nokia (NOK) Stock Jumps as Morgan Stanley Names It Top Pick

TLDR

• Morgan Stanley raised its Nokia price target to €8.50 from €6.50, making it the highest street target, with an Overweight rating
• The upgrade is driven by rising AI and cloud infrastructure spending, particularly in optical and IP networking
• Nokia’s AI/cloud revenue is only ~6% of total revenue but growing fast, with Morgan Stanley forecasting ~13% growth in the segment for 2026
• Competing analyst downgrades from DNB Carnegie and Danske Bank had previously weighed on the stock, alongside a reduced 2026 profit outlook
• Nokia’s ADR (NOK) was near $7.90 on Tuesday, while Helsinki-listed stock has gained ~24% year-to-date

Nokia, the Finnish telecom equipment maker, got a notable lift this week after Morgan Stanley made it a top pick and set a new street-high price target.

Nokia Oyj, NOK

The bank raised its target to €8.50 from €6.50, keeping an Overweight rating on the stock. That puts it ahead of every other analyst covering the name, according to Bloomberg data.

The move follows strong results from optical networking rival Ciena, which posted solid cloud-related revenue growth. Morgan Stanley said those numbers back up the view that Nokia’s own guidance for its Optical and IP division could be too conservative.

Nokia guided for 10% to 12% revenue growth in that segment. Morgan Stanley is penciling in around 13%, with optical networking revenue alone expected to climb more than 20%, fueled by hyperscale data center operators.

The stock has had a volatile few weeks. Helsinki-listed Nokia jumped more than 12% the week before and surged over 37% in the past month — setting up conditions for some profit-taking. The stock dipped roughly 5% midweek after slipping below its 5-day moving average.

The ADR on the New York Stock Exchange was near $7.90 at Tuesday’s close, up 1.28% on the session. The Helsinki stock sat at €6.83 on Wednesday, up about 24% year-to-date.

Competing Downgrades Add Some Noise

Not everyone is bullish. DNB Carnegie cut Nokia from buy to hold on March 10, with a $6.50 target. Danske Bank made a similar move in late February, also at $6.50.

Those downgrades, combined with Nokia’s decision to lower its 2026 profit outlook when reporting Q4 results, have kept some investors cautious — even though Nokia slightly beat earnings expectations.

In Q4, Nokia posted adjusted operating profit of €435 million on net sales of €4.83 billion, with revenue up 12% year-over-year. Profitability was down about 10% compared to the prior year period.

The mobile networks segment remains a weak spot, with radio access network spending still muted and mobile revenue down roughly 2% year-over-year last quarter.

AI and Cloud Driving the Story

Nokia’s AI and cloud-related business is still a small slice of total revenue — about 6% — but it is growing quickly and helping to offset softer telecom operator spending.

Morgan Stanley lifted its valuation multiple from 10× to 14× on expected operating profit, pointing to Nokia’s growing exposure to data center connectivity markets.

Nokia already supplies networking equipment to Microsoft Azure and works with NVIDIA on AI networking. NVIDIA holds a 2.9% stake in the company.

The bank flagged the Optical Fiber Communication Conference, running March 15 to 19, as a near-term event to watch. It could bring updates on Nokia’s optical strategy and potential new hyperscale partnerships.

Moody’s reaffirmed Nokia’s Ba1 credit rating in December and lifted its outlook to positive, citing expected profitability gains through 2026 to 2028. Nokia ended September 2025 with roughly €6.1 billion in cash and committed credit facilities.

The overall analyst picture remains cautiously positive. A MarketBeat consensus from early January showed a “Moderate Buy” with 8 buys, 3 holds, and 1 sell across 12 analysts. The mean 12-month ADR target was around $6.10, though some models put it closer to $7.36, with the high now at $8.50 — set by Morgan Stanley.

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