Nokia (NOK) Stock Surges After Morgan Stanley Sets Street-High Price Target

Key Takeaways

• Morgan Stanley elevated Nokia’s price target to €8.50 from €6.50, establishing the highest analyst target on Wall Street with an Overweight rating
• The bullish call stems from accelerating AI and cloud infrastructure investments, especially in optical and IP networking sectors
• While AI/cloud revenue represents just ~6% of Nokia’s total sales, Morgan Stanley projects robust ~13% growth in this segment through 2026
• Recent analyst downgrades from DNB Carnegie and Danske Bank created headwinds, coupled with Nokia’s lowered 2026 profit guidance
• Nokia’s ADR (NOK) traded around $7.90 on Tuesday, while the Helsinki-listed shares have climbed approximately 24% year-to-date

Nokia, the telecommunications equipment giant based in Finland, received a significant boost this week when Morgan Stanley designated it as a top pick and established a new Wall Street-leading price target.

Nokia Oyj, NOK

The financial institution increased its price objective to €8.50 from €6.50, maintaining an Overweight rating. This valuation surpasses all other analysts tracking the company, based on Bloomberg’s compiled data.

The upgrade comes on the heels of impressive results from Ciena, a competitor in optical networking, which delivered robust cloud-driven revenue expansion. Morgan Stanley believes these figures validate the thesis that Nokia’s own projections for its Optical and IP business unit may be understated.

Nokia has provided guidance for 10% to 12% revenue expansion in this division. However, Morgan Stanley is modeling approximately 13% growth, with optical networking revenue specifically projected to surge over 20%, driven by hyperscale data center operators.

The shares have experienced significant volatility in recent weeks. Helsinki-traded Nokia shares jumped more than 12% in the prior week and soared over 37% across the past month — creating conditions ripe for some consolidation. The stock retreated roughly 5% midweek after dropping below its 5-day moving average.

The ADR trading on the New York Stock Exchange hovered near $7.90 at Tuesday’s market close, gaining 1.28% during the session. The Helsinki-listed shares stood at €6.83 on Wednesday, representing approximately 24% gains year-to-date.

Mixed Analyst Sentiment Creates Uncertainty

The analyst community isn’t universally optimistic. DNB Carnegie downgraded Nokia from buy to hold on March 10, establishing a $6.50 price target. Danske Bank executed a comparable downgrade in late February, also setting a $6.50 objective.

These downgrades, along with Nokia’s choice to reduce its 2026 profit forecast during its Q4 earnings release, have maintained caution among certain investors — despite Nokia marginally exceeding earnings projections.

For Q4, Nokia delivered adjusted operating profit of €435 million against net sales of €4.83 billion, with revenue climbing 12% year-over-year. However, profitability declined approximately 10% versus the comparable prior-year quarter.

The mobile networks division continues to struggle, with radio access network investment remaining subdued and mobile revenue declining roughly 2% year-over-year in the latest quarter.

AI and Cloud Infrastructure Fueling Growth

Nokia’s AI and cloud-connected business currently represents a modest portion of total revenue — approximately 6% — but is expanding rapidly and helping to counterbalance weaker spending from traditional telecom operators.

Morgan Stanley increased its valuation multiple from 10× to 14× on projected operating profit, highlighting Nokia’s expanding presence in data center connectivity markets.

Nokia currently provides networking infrastructure to Microsoft Azure and collaborates with NVIDIA on AI networking solutions. NVIDIA maintains a 2.9% ownership position in the company.

The investment bank identified the Optical Fiber Communication Conference, scheduled for March 15 to 19, as an important near-term catalyst. The event could deliver updates regarding Nokia’s optical strategy and potentially announce new hyperscale partnerships.

Moody’s confirmed Nokia’s Ba1 credit rating in December and upgraded its outlook to positive, referencing anticipated profitability improvements spanning 2026 to 2028. Nokia concluded September 2025 with approximately €6.1 billion in cash and committed credit facilities.

The broader analyst consensus leans cautiously optimistic. A MarketBeat survey from early January reflected a “Moderate Buy” rating with 8 buy recommendations, 3 hold ratings, and 1 sell rating among 12 analysts. The average 12-month ADR price target stood around $6.10, though certain models positioned it closer to $7.36, with the upper range now reaching $8.50 — established by Morgan Stanley.

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