After 139% YTD Gain, Nokia Draws Bullish Price Targets from Morgan Stanley and CFRA Alike

Nokia stock doubles in 2025, driven by AI infrastructure strategy. Analysts lift targets, data-center revenue growth accelerates. Key events ahead: Ciena earnings, Q2 results.

Nokia shares closed at a fresh 52-week high of €13.30 on Friday, extending a blistering run that has seen the stock more than double since the start of the year. The rally has been fueled by a rapid re-rating as the Finnish telecom equipment maker successfully pitches itself as an AI infrastructure play. Morgan Stanley added to the momentum last week, lifting its price target to €14 from €11 and reaffirming Nokia as a top pick, while CFRA upgraded the stock to "Buy" and doubled its target to $16. Argus followed suit with a $15 price objective. The consensus is clear: the market is no longer valuing Nokia alongside legacy telecom gear makers like Ericsson, but it has yet to reach the lofty multiples of pure-play networking specialists such as Arista.

The strategic pivot that underpins this shift was underscored by the opening of Nokia’s new AI Networking Innovation Lab in Sunnyvale, California, where it will collaborate with AMD, Lenovo, and Supermicro on next-generation network architectures and advanced circuits for AI data centres. The lab sits atop a strong operational foundation: first-quarter comparable operating profit surged 54% to €281 million, driven by a roughly €1 billion order intake from cloud and AI customers. Morgan Stanley now expects Nokia’s data-centre revenue — which reached €1.1 billion in 2025 — to grow 21% this year, ahead of the company’s own revised guidance of 18% to 20% (previously 10% to 12%). The broader network infrastructure division is also seeing an upgrade, with management lifting its full-year growth forecast to 12%–14%.

That optimism has pushed Nokia shares to trade at roughly 30 times forward earnings, a multiple that reflects the AI narrative but also leaves little room for error. The potential reward is a possible inclusion in the Euro Stoxx 50 in September, which could trigger additional index-linked buying. For now, however, the stock sits just 5% below Morgan Stanley’s new target, suggesting the market has already priced in much of the good news. The degree of that pricing becomes clearer when you consider the stock is currently more than 45% above its 50-day moving average. The 30-day annualised volatility stands at nearly 70%, underscoring just how sharp the moves have been.

The technical picture provides limited directional clues. The relative strength index (RSI) is hovering at 36.9, well below overbought territory despite the sustained rally. Still, the market is acutely sensitive to macro data. The next test comes on 28 May with the release of US PCE inflation figures; a hotter-than-expected print could pressure tech stocks broadly, Nokia included.

Looking further ahead, a pair of events will test the demand story underpinning the re-rating. On 4 June, optical networking rival Ciena reports quarterly results — a strong showing would lend credibility to Nokia’s own growth narrative. Then on 23 July, Nokia publishes its second-quarter numbers. The consensus is looking for revenues of €4.8 billion and a comparable operating profit of €372 million. One lingering risk: AI and cloud contributed just 8% of total sales in the first quarter, meaning the company remains heavily dependent on traditional telecom capex cycles. For the moment, though, the market seems willing to look past that, betting that the transformation is real — and accelerating.