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Nokia Rises 159.6% in the Past Six Months: Is There More Upside Ahead?
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Key Takeaways
Nokia gained 159.6% in six months, outperforming its industry, sector and the S&P 500.
Nokia launched an AI Networking Innovation Lab with partners including AMD, Lenovo and Supermicro.
Nokia faces telecom revenue weakness, flat Radio Networks growth and intense industry competition.
Nokia Corporation (NOK - Free Report) shares have gained 159.6% in the past six months compared with the industry’s growth of 43.8%. The stock has outperformed the Zacks Computer & Technology sector and the S&P 500 during the same time frame.
Image Source: Zacks Investment Research
The company has outperformed its peers like Arista Networks, Inc. (ANET - Free Report) and Ericsson (ERIC - Free Report) . Shares of Ericsson have jumped 37.6%, and shares of Arista have risen 33.6%.
Key Growth Drivers for Nokia
Nokia is actively venturing into the fast-growing AI data center networking market. The company launched an AI Networking Innovation Lab in Sunnyvale, California, where customers and partners can design, test and validate AI networking architectures. AI training clusters require ultra-low latency, high bandwidth and advanced congestion management.
By supporting enterprises in testing and matching these requirements, Nokia is strengthening its position in the AI networking market. The lab already includes partnerships with major players such as AMD, Lenovo, Viavi, Keysight and Supermicro. Such growing collaboration with industry leaders is expected to drive the adoption of NOK data center switches and increase its overall AI-related revenue opportunity.
Nokia is also embedding AI directly into the operation of broadband networks. The company is introducing AI agents across its Altiplano, Corteca and Broadband Easy platforms, enabling telecom operators to automate network planning, deployment, troubleshooting and customer support. Nokia’s AI agent effectively addresses major issues for broadband operators, such as rising operational costs and growing complexity related to fiber and Wi-Fi networks. It is leveraging experience from more than 600 million deployed broadband lines, creating a substantial data advantage. This makes the AI system more precise.
Beacon and Optical Network Terminal broadband devices received conditional approval from the U.S. Federal Communications Commission, exempting the products and future variants from Covered List restrictions. The approval enables service providers to continue deploying Nokia’s broadband solutions without disruption and supports long-term network investment planning. Such developments bode well for long-term sustainable growth.
Major Challenges
Nokia is experiencing weakness in its telecom business. Telecommunication Provider revenues declined 2% year over year in the first quarter of 2026. Nokia generates 73% of total revenues from this vertical. Declining trends in this segment remain a major concern for the company.
The Radio Networks business also remained flat year over year, owing to weak demand in the North America region. Amid weakness in its legacy business, Nokia is also facing competition from other major players in the industry. Ericsson remains a major competitor in verticals like radio access networks (RAN), core networks and AI RAN. In the AI data center networking, it faces competition from Arista Networks.
It generates substantial revenue across international markets and remains exposed to economic slowdowns, political uncertainty, regulatory changes and geopolitical disruptions. These factors can affect customer spending decisions, supply chains and project timing. The company’s history of acquisitions and broad global footprint also introduces integration and operational complexities.
Estimate Revision Trend
The company’s earnings estimates for 2026 and 2027 have improved over the past 60 days.
Image Source: Zacks Investment Research
Key Valuation Metric of NOK
From a valuation standpoint, NOK is currently trading at a premium compared to the industry. Going by the price/earnings ratio, the company’s shares currently trade at 37.18 forward earnings, higher than 35.59 for the industry and above its mean of 16.26.
Image Source: Zacks Investment Research
End Note
AI and cloud and vertical are emerging as major growth drivers for the company. Strong demand from AI data centers and cloud providers is driving growth in the optical networks vertical. Launch of leading-edge AI innovation lab and growing collaboration with major players such as AMD, Lenovo, Supermicro, Keysight and VIAVI is strengthening its position as a key supplier of AI-native data center networking infrastructure. However, stiff competition from other major players and sluggish spending behavior from telecom customers are weighing on margins. With a Zacks Rank #3 (Hold), Nokia appears to be treading in the middle of the road, and new investors could be better off if they trade with caution. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Nokia Rises 159.6% in the Past Six Months: Is There More Upside Ahead?
Key Takeaways
Nokia Corporation (NOK - Free Report) shares have gained 159.6% in the past six months compared with the industry’s growth of 43.8%. The stock has outperformed the Zacks Computer & Technology sector and the S&P 500 during the same time frame.
Image Source: Zacks Investment Research
The company has outperformed its peers like Arista Networks, Inc. (ANET - Free Report) and Ericsson (ERIC - Free Report) . Shares of Ericsson have jumped 37.6%, and shares of Arista have risen 33.6%.
Key Growth Drivers for Nokia
Nokia is actively venturing into the fast-growing AI data center networking market. The company launched an AI Networking Innovation Lab in Sunnyvale, California, where customers and partners can design, test and validate AI networking architectures. AI training clusters require ultra-low latency, high bandwidth and advanced congestion management.
By supporting enterprises in testing and matching these requirements, Nokia is strengthening its position in the AI networking market. The lab already includes partnerships with major players such as AMD, Lenovo, Viavi, Keysight and Supermicro. Such growing collaboration with industry leaders is expected to drive the adoption of NOK data center switches and increase its overall AI-related revenue opportunity.
Nokia is also embedding AI directly into the operation of broadband networks. The company is introducing AI agents across its Altiplano, Corteca and Broadband Easy platforms, enabling telecom operators to automate network planning, deployment, troubleshooting and customer support. Nokia’s AI agent effectively addresses major issues for broadband operators, such as rising operational costs and growing complexity related to fiber and Wi-Fi networks. It is leveraging experience from more than 600 million deployed broadband lines, creating a substantial data advantage. This makes the AI system more precise.
Beacon and Optical Network Terminal broadband devices received conditional approval from the U.S. Federal Communications Commission, exempting the products and future variants from Covered List restrictions. The approval enables service providers to continue deploying Nokia’s broadband solutions without disruption and supports long-term network investment planning. Such developments bode well for long-term sustainable growth.
Major Challenges
Nokia is experiencing weakness in its telecom business. Telecommunication Provider revenues declined 2% year over year in the first quarter of 2026. Nokia generates 73% of total revenues from this vertical. Declining trends in this segment remain a major concern for the company.
The Radio Networks business also remained flat year over year, owing to weak demand in the North America region. Amid weakness in its legacy business, Nokia is also facing competition from other major players in the industry. Ericsson remains a major competitor in verticals like radio access networks (RAN), core networks and AI RAN. In the AI data center networking, it faces competition from Arista Networks.
It generates substantial revenue across international markets and remains exposed to economic slowdowns, political uncertainty, regulatory changes and geopolitical disruptions. These factors can affect customer spending decisions, supply chains and project timing. The company’s history of acquisitions and broad global footprint also introduces integration and operational complexities.
Estimate Revision Trend
The company’s earnings estimates for 2026 and 2027 have improved over the past 60 days.
Image Source: Zacks Investment Research
Key Valuation Metric of NOK
From a valuation standpoint, NOK is currently trading at a premium compared to the industry. Going by the price/earnings ratio, the company’s shares currently trade at 37.18 forward earnings, higher than 35.59 for the industry and above its mean of 16.26.
Image Source: Zacks Investment Research
End Note
AI and cloud and vertical are emerging as major growth drivers for the company. Strong demand from AI data centers and cloud providers is driving growth in the optical networks vertical. Launch of leading-edge AI innovation lab and growing collaboration with major players such as AMD, Lenovo, Supermicro, Keysight and VIAVI is strengthening its position as a key supplier of AI-native data center networking infrastructure. However, stiff competition from other major players and sluggish spending behavior from telecom customers are weighing on margins. With a Zacks Rank #3 (Hold), Nokia appears to be treading in the middle of the road, and new investors could be better off if they trade with caution. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.