Nokia Shares Surge on Major Analyst Revisions

Goldman Sachs and Morgan Stanley raise Nokia's price target, citing AI optical networking potential and a major 5G contract, driving shares to a new peak.

A dramatic shift in sentiment from Wall Street analysts has propelled Nokia's stock to a new 52-week high. The most notable change came from Goldman Sachs, which executed a rare and substantial reversal of its position on the Finnish telecommunications giant.

A Pivotal Upgrade Sparks Momentum

In late March, Goldman Sachs lifted its rating on Nokia from "Sell" to "Neutral." In a move that captured market attention, the investment bank nearly doubled its price target for the stock, raising it from €3.50 to €8.00. This revision is widely viewed as a primary catalyst for the recent rally in Nokia's share price, which culminated in a new 52-week peak last Friday.

The rationale behind Goldman's change of heart centers on a reassessment of Nokia's optical and IP networking divisions. Analysts now identify the company as a potential beneficiary of the ongoing global expansion in artificial intelligence infrastructure. They argue that optical networks, which connect AI data centers, are gaining strategic importance in an environment constrained by computing power and energy capacity. Supporting this view, Nokia reported a backlog of approximately €2.5 billion from its cloud and AI segment at the end of 2025.

Broader Market Confidence Builds

The positive momentum was reinforced when Morgan Stanley followed suit, increasing its own price target from €6.50 to €8.50. Market activity reflected this growing confidence. Trading volume on Friday reached roughly 88.7 million shares, nearly double the three-month average—a clear indicator of heightened investor interest. Concurrently, call option volume surged to over 58,000 contracts, about 27% above typical levels.

Further positive news arrived in the form of a multi-year contract with Virgin Media O2 to expand the UK's 5G network. Under this agreement, Nokia will supply its AirScale portfolio, including energy-efficient Massive MIMO antennas, underscoring the company's continued relevance in the European mobile market.

Restructuring and Acquisition Form Strategic Backdrop

These developments occur against a backdrop of significant internal change at Nokia. The company is implementing a large-scale restructuring program, reducing its global workforce by up to 14,000 positions, or about 20% of its employees. This difficult step is a response to weaker demand in the traditional telecom equipment sector. The mobile network infrastructure business, which once accounted for nearly half of group revenue, now represents only about 30%.

Adding another layer to the transformation, Nokia completed its acquisition of Infinera Corporation in February 2025. Management anticipates the deal will contribute positively to both profit and earnings per share in 2025, with a target of achieving over €200 million in comparable operating profit synergies by 2027.

Valuation and the Upcoming Earnings Test

Nokia's stock has more than doubled since its low in August of last year and currently trades at its 52-week high. With a two-year forward price-to-earnings ratio of approximately 17, the shares now command a premium of about 10% compared to the broader European technology sector. Historically, Nokia has traded at a discount of around 40% to this sector.

The upcoming quarterly results, scheduled for release on April 23, will serve as a critical test for the current valuation. Investors will scrutinize whether the optical networking segment is genuinely capitalizing on AI-driven demand and if new 5G contracts can sufficiently offset persistent softness in the core mobile network business.