From TradingView · · 2m
Nokia rises as analyst sees hidden AI infrastructure play
Rosenblatt initiated coverage with a Buy rating, calling Nokia an undervalued AI optical powerhouse trading at telecom multiples.
In brief
Rosenblatt initiated coverage with a Buy rating, calling Nokia an undervalued AI optical powerhouse trading at telecom multiples. Nokia's optical networking business for AI infrastructure may be undervalued by a market that still sees it as a traditional telecom company. Originally reported by TradingView.
Nokia jumps after bullish call
Rosenblatt initiated coverage with a Buy rating and $15 price target, implying 55% upside. The stock rose over 1% overnight after falling 13% during regular trading.
Analyst sees AI optical powerhouse
Rosenblatt describes Nokia as an AI optical powerhouse currently valued like a traditional telecom company. The firm believes the market overlooks Nokia's growing importance in AI infrastructure.
Optical networking drives the thesis
Nokia's optical networking moves large amounts of data quickly, becoming critical as AI workloads demand more bandwidth and speed. This technology is essential for AI data center buildouts.
Scale-across creates sticky revenue
Nokia has captured meaningful business in scale-across, one of three optical networking fabrics. Once embedded into network designs, this equipment is difficult for customers to replace.
Business mix shifting toward AI
Rosenblatt estimates Nokia currently derives one-third of infrastructure exposure from AI and two-thirds from telecom. That mix could change substantially as AI investment remains elevated.
Valuation gap creates opportunity
AI infrastructure companies command higher multiples than telecom suppliers. If the market re-rates Nokia toward AI infrastructure valuation, there could be significant upside.
Target may be conservative
Rosenblatt calls its $15 target potentially conservative. The firm suggests Nokia's consistent shift toward AI could leave room for further revaluation if the company continues winning business.
The dark horse label explained
Nokia is overlooked by investors who associate it with traditional telecom rather than AI infrastructure. Yet its optical networking capabilities give it a meaningful role supporting AI.
Proof still needed
Recent volatility shows sentiment remains fragile. Nokia must convert its AI infrastructure positioning into visible financial results to justify a higher valuation multiple.
The essence
Nokia's optical networking business for AI infrastructure may be undervalued by a market that still sees it as a traditional telecom company.
