Investing.com — Financial institution of America analysts on Monday upgraded to Purchase from Impartial and raised their worth goal to €10.70 ($12.40) from €6.87 ($7.96), citing the Finnish telecom tools maker’s rising publicity to optical networking and hyperscaler demand pushed by AI knowledge heart buildout.
The corporate’s shares rose almost 2% in Helsinki by 11:46 GMT.
The financial institution’s analysts, led by Oliver Wong, moved to a sum-of-the-parts valuation from an EV/EBITDA methodology, making use of a 30x a number of on 2027 estimated EBIT for and a 10x a number of on the remainder of the corporate.
BofA’s bullish case facilities on Nokia’s transformation following its acquisition of Infinera in 2025, which meaningfully expanded the corporate’s publicity to U.S. cloud prospects.
The analysts forecast to develop at a 17% compound annual price (CAGR) via 2028, pushed by continued optical techniques demand and an anticipated inflection in coherent pluggable revenues because the business shifts from 400G to 800G speeds.
“Nokia is now reworking into an optical powerhouse with a European benefit,” the analysts wrote, including that they see the corporate’s 10-12% Optical and IP Networks progress steering as conservative and count on Nokia to beat and lift it.
On IP Networks, BofA sees Nokia capturing a major share in European knowledge heart switches, significantly via its partnership with NScale, a neocloud operator centered on the continent. The financial institution estimates Nokia may generate €226 million in knowledge heart switching income in 2026, rising to €407 million by 2028.
For Cellular Infrastructure, which stays Nokia’s largest phase by income, BofA expects working margins to increase from 13.4% in 2025 to 17.8% by 2028 via portfolio pruning and a better software program focus.
The analysts additionally view Nokia’s partnership with Nvidia, which invested $1 billion in Nokia in October 2025, as a possible longer-term constructive for AI-RAN, although it doesn’t mannequin important near-term income from the collaboration.
BofA mentioned its 2026-2028 EPS estimates are 13-15% above Avenue consensus. Potential Huawei and ZTE alternative in Europe represents extra upside not at present included within the financial institution’s base case estimates.
