Nokia (NYSE: NOK) shares have climbed nearly 90% over the past year, trading at $10.23 near the 52-week high of $10.69. Bank of America analysts recently boosted their price target for the telecom giant from $12.40 to $12.70 and reaffirmed a ‘Buy’ rating.
Upgraded Sales Forecast Drives Optimism
Executives at Nokia have revised their 2026 comparable sales growth outlook for the Optical & IP Networks division upward from 10-12% to 18-20%. Strong demand for data center switches in the Optical Networks segment is expected to fuel this expansion, particularly from hyperscale customers.
The acquisition of Infinera positions Nokia to better serve U.S. hyperscalers, enhancing its competitive edge in key markets. Previously, analysts noted Nokia’s focus on smaller-scale data center projects in select European countries, but recent shifts emphasize larger opportunities.
Future Growth Projections
Bank of America also lifted sales growth estimates for 2027-2028 to 2-4%, signaling improved business momentum. These changes result in adjusted EBIT margins of -0.6% for 2026, -0.2% for 2027, and +3.2% for 2028.
The updated price target relies on a sum-of-the-parts valuation across business units. However, analysts caution that full realization hinges on successful new product launches and M&A integration.
Strong Q1 Performance
Nokia exceeded first-quarter 2026 expectations with earnings per share (EPS) of $0.0586, surpassing forecasts of $0.0446 by 31.39%. Sales reached 5.32 billion euros, topping estimates of 5.27 billion euros and underscoring robust demand.
This outperformance reflects growing investor confidence amid Nokia’s expansion in AI-related orders, which doubled to 10 billion euros in the second half of the period. AI orders are projected to hit 24 billion euros in 2025.
Broader Analyst Support
Raymond James analysts echoed the positive sentiment, raising their Nokia price target from $7.00 to $12.00 and upgrading to ‘Outperform’. The momentum stems from Nokia’s strong AI sector exposure and healthy cash generation capabilities.
