JPMorgan believes the company's "strong" product lineup will give it a competitive advantage in maintaining its lead in the optical market.
- JPMorgan analyst Sandeep Deshpande more than doubled Nokia’s price target to $21 from $14, implying roughly 50% upside from the stock’s last closing price.
- Nokia previously flagged plans to increase its optical network investments due to soaring demand.
- Morningstar, in its recently published note, said demand from hyperscalers for optical networking will drive the most revenue growth for Nokia over the next several years.
U.S.-listed shares of Finnish network equipment solutions provider Nokia (NOK) edged up higher on Friday after JPMorgan issued positive commentary on the company’s growing optical business.
At the time of writing, NOK stock rose nearly 2% in premarket trading.
JPMorgan’s Takeaway
JPMorgan analyst Sandeep Deshpande noted that the company’s €1 billion ($1.16 billion) in cloud and artificial intelligence orders were primarily from its growing optical networks business. The firm believes the company's "strong" product lineup will give it a competitive advantage in maintaining its lead in the optical market, according to TheFly.
JPMorgan said that with Nokia's own indium phosphide fab capacity and packaging capabilities, the company will see orders accelerate significantly in 2026, and that momentum will continue into 2027. The firm kept its bullish ‘Overweight’ rating and raised its price target to $21 from $14, implying roughly 50% upside from the stock’s last closing price on Thursday.
Nokia Increases Optical Investments
Nokia previously flagged plans to increase its optical network investments due to soaring demand. “We are increasing our growth assumption for Optical and IP Networks, and we are investing to capture accelerating demand from AI & cloud customers," Nokia CEO Justin Hotard said during the first-quarter earnings report.
Bank of America said last week that Nokia is well-positioned as a data center interconnect and scale-across leader in optical transport and is set to ramp data center switching revenues, per TheFly.
Morningstar, in its recently published note, said demand from hyperscalers for optical networking will drive the most revenue growth for Nokia over the next several years. The firm also pointed out that restrictions on Chinese competitors in Western markets for the supply of optical equipment have led the industry to rely mainly on Nokia and rival Ciena (CIEN).
What Do Retail Traders Think About NOK?
On Stocktwits, retail sentiment around NOK stock remained in ‘bearish’ territory over the past 24 hours.
One user on the platform said Nokia’s technology is absolutely vital to the success of the entire AI ecosystem.
View this Stocktwits post
NOK stock has more than doubled in value so far this year and nearly tripled over the past 12 months, outperforming the S&P 500.
(€1 = $1.15)<
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