Finn Stockinger
Equity Analyst & Investor, Technology Research
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 being re-rated from a cyclical telecom hardware vendor into a core infrastructure backbone. Its Lockheed partnership pivots it toward defense, effectively making it a sovereign tech layer, and the Infinera integration landed just as data center demand for optical transport peaks. If it keeps hitting its numbers, the re-rating should continue. @theincomewheel cites NVIDIA's $1 billion investment and Microsoft as a named hyperscaler. x.com
Nokia's expected 2028 earnings do not make the stock particularly attractive at today's multiple. Even assuming EUR3.5bn of operating profit and a 17x multiple, the implied value is about $12.40, leaving the thesis dependent on multiple expansion. Datacenter and optical progress is good, but more growth in satellite communications and subsea would strengthen the case. x.com x.com x.com
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
Nokia is a long, not a trade: a telecom giant with a fast-growing AI segment. AI & Cloud revenue rose 105% to €446M in Q2, about 9% of the group, and orders tripled to €2.8B, roughly half converting within 12 months. Optical reached 18% of revenue, lifting a sum-of-parts estimate to about $17.20, and buying NXP's Chandler plant for InP adds capacity. Headline results were weak and capacity constrains supply, so pure-play optical names may move faster near term. x.com x.com
Nokia offers no quality, growth or value edge, so it fits no portfolio strategy despite its 76% year-to-date rally, and growth potential in its Network Infrastructure segment is relatively modest. x.com
Nokia does not deserve the roughly 50x multiples of optical pure plays like Ciena and Coherent, because it still carries large, shrinking legacy businesses in wireless, PON and routing. This rebuts Citron Research's case that comparisons with those peers make Nokia a $20 stock. 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
Lumentum is an essential, bottleneck-constrained supplier to AI clusters as optics replace copper at its physical limit, not a commoditized transceiver vendor, so it remains undervalued with a path well above $1,000 a share. Per CEO Michael Hurlston, capacity is sold out. Gross margins are nearing 48%, backlog stretches through 2028 and Nvidia's $2B partnership runs through it. The shift to scale-up CPO and indium phosphide lasers and a reported US ban on Chinese data center sourcing favor it. … Show more
Lumentum and Coherent sit at the center of a multiplicative optical bottleneck, where parts, capacity, yield and customer sign-off each limit output. Next-gen AI clusters need optical interconnect, and McKinsey sees 800G transceiver output 40-60% short of demand through 2027 as the market doubles to $26B in 2026. Nvidia invested $2B each in both to lock in laser supply, and the FCC is drafting curbs on Chinese transceiver imports; Chinese suppliers hold ~60% of optical-component revenue. x.com … Show more
Nokia is becoming a credible Western AI infrastructure pick, though only its Network Infrastructure half. The Infinera deal added in-house photonic chip fabs and hyperscaler access, Nvidia's $1B stake brings AI-RAN co-design, and the segment grew 23% in FY25 with EUR2.4B of AI and cloud orders. Licensing at near-100% gross margin and EUR4.9B of net cash add support, while Mobile Networks is a commoditizing anchor. Risks: AI capex peaking before Nokia wins optical share, and synergy slippage. … Show more
Applied Optoelectronics' quarterly miss reflects capacity constraints amid insane demand, not weak demand. Capacity comes online mid-quarter, so Q1 revenue of $151M with about $190M guided next quarter implies a steep ramp toward perhaps $550-600M per quarter by 1Q27. Second-half 2026 guidance of $750-760M versus $350-370M in the first half points toward $2B next year with high margins. The market overreacted, and the reset removes an overhang for long-term holders. x.com x.com x.com x.com x.com
