Herman Jin
Formerly in Asia FICC at Goldman Sachs, Macro & Semiconductor Investing
Nokia's quarter was a large beat once restructuring charges are removed, so the selloff reflects an ugly headline rather than the business. The order backlog is full and the AI business is doubling. A one-time impairment made the headline look bad, European companies tend to set conservative expectations, and the market lately sells on headlines alone. x.com x.com x.com
Nokia holds scarce InP fab capacity and has delivered on AI-RAN, so short-term sentiment does not matter. By 2028 its InP fab capacity should be roughly on par with Lumentum's, and such capacity cannot easily be built, so short-term good or bad news can be ignored. Its AI-RAN samples also look good. x.com x.com
Nokia's agentic-AI work with Nvidia adds another bullish development to its network-automation case. Nokia says their models and network intelligence help operators act on insights while keeping control of sensitive data. L&T Technology Services also announced engineering and R&D work with Nokia in India; after strong Q3 results, the shares still look ridiculously priced. x.com x.com
Nokia's AI networking demand remains strong, and supply rather than demand is now its constraint. In Q2, AI and cloud customer revenue rose 105%, optical 20% and IP 16%. AI and cloud orders reached EUR 2.8B, up from EUR 1B in Q1, with about half expected to convert to revenue within 12 months. Management did not raise full-year guidance because supply of key parts such as indium phosphide devices and lasers limits delivery; as supply eases, the backlog should keep turning into revenue. x.com … Show more
Nokia's guidance raise was just an accounting shift, leaving a steep climb to its profit target. The bump to €2.1-2.6 billion came from moving two business lines into discontinued operations; JPMorgan asked why operating targets weren't raised. With about €735 million of H1 operating profit, Nokia needs €1.8-1.9 billion in H2 for the top end, so delays risk a miss. Memory and optics remain bottlenecks, and only about half of €2.8 billion in AI and Cloud orders converts within 12 months. x.com … Show more
AI product, networking, compute and power demand could reward patient owners of Meta, Nokia, Oracle, Broadcom, IREN and Vistra. Meta's Muse could unlock massive revenue; free cash flow could recover when AI spending slows. Nokia works with Nvidia on AI-RAN and 6G. Oracle has $664B in obligations and massive potential reward from OpenAI. Broadcom's AI chip revenue rose 221% to $16.7B; IREN has a $9.7B Microsoft contract and 5 GW of power. AI power bottlenecks favor Vistra. x.com x.com x.com x.com … Show more
Nokia's AI and cloud orders are set to turn into revenue, with about half of Q2's EUR 2.8B intake expected to convert over the next 12 months. Its San Jose fab ramps in Q4, Pennsylvania test and packaging capacity expands 10x from Q3, and an NXP Chandler fab lease for indium phosphide chips starts in early 2027, all for demand expected in 2027-28. Nokia targets EUR 2.7-3.2B of comparable operating profit by 2028, up from EUR 2.1-2.6B guided for 2026. x.com
Nokia looks overhyped for now, and a weak Q3 could bring a short-term pullback despite a bright long-term setup. Management said Q3 will be flat because high-margin software revenue was pulled into Q2, and restructuring charges of €390M still weigh. AI and cloud revenue rose 105%, with €2.8B of binding Q2 orders, but memory and optical supply limits are capping growth. Q4 needs to confirm the thesis before buying, likely toward year-end. x.com x.com x.com
Nokia is turning into an AI network powerhouse, and its fundamentals and technicals are aligning for a major move. Its $1 billion Nvidia partnership on AI-RAN and 6G is entering live commercial trials with operators this month, a Microsoft expansion links Nokia Data Suite with Microsoft Fabric, and it is converting a €2.8 billion AI order book while winning AI-native 5G deals with Taiwan Mobile and Chunghwa Telecom. Price has reclaimed its 50 and 200 EMAs; a move above 12 could reach 13+. x.com
Nokia's AI order book is driving analysts to raise price targets, a very bullish sign. BofA raised its target to $18.50 from $18 and reiterated Buy, calling worries about no full-year guidance raise misplaced since most of the quarter's orders land in 2027-2028. JPMorgan lifted its target to $21 from $14, roughly 50% upside, citing optical and AI/cloud acceleration and Nokia's own indium phosphide fab capacity. x.com
Nokia's story keeps getting better, with a turnaround still in its early stages that recalls Intel's. AI-driven network demand, optical growth, inflecting fundamentals and an expanding defense angle all support it. @BanyanLaneCap adds that as AI rebuilds connectivity, Nokia has many ways to win beyond the next two to three years, with real IP and only a few global competitors. x.com
Nokia is an overlooked AI-infrastructure play now that it has launched its first commercial AI-RAN. It is down about 40%, has recent upgrades to Buy from SEB and Danske, and offers real AI optionality. Conviction is lower, since the story needs its guidance to confirm it. x.com
