Key Takeaways:
Argus upgraded Nokia (NOK) to Buy from Hold with a new $15 price target, citing surging demand for the company’s networking gear from the artificial intelligence and data center sector.
"The analyst’s upgrade hinges on AI-related demand showing up in Nokia’s order book," a report from Argus stated, highlighting the company's raised 2026 revenue growth guidance for its Network Infrastructure business.
The upgrade follows a strong first-quarter report where Nokia’s AI and cloud sales grew 49 percent. The stock rose 7 percent on the news, and is up 67 percent year-to-date, signaling growing investor confidence in the company's AI-driven turnaround.
Argus's thesis centers on the explosive growth in "east-west" traffic within data centers, as AI applications require massive communication between servers. This plays directly into the strengths of Nokia's optical and IP routing hardware. The firm believes Nokia is well-positioned to take market share from competitors like Cisco Systems (CSCO) and Arista Networks (ANET). The upgrade comes after Nokia raised its 2026 revenue growth forecast for the Network Infrastructure segment, the unit most exposed to data center spending.
The bullish call from Argus is the latest in a series of positive developments for Nokia. The company's stock surged to a 16-year high in April after it reported first-quarter operating profit that jumped 54 percent, crushing analyst estimates. AI and cloud-related sales grew 49 percent in the quarter, and the company booked over €1 billion in new orders from the sector. In response to the strong results, Nokia boosted its 2026 growth guidance for the Network Infrastructure division to 12-14 percent, up from a prior forecast of 6-8 percent. Other analysts have also turned more positive, with Bank of America upgrading the stock to "Buy" in early April and Northland raising its price target to $13.
Despite the optimism, risks remain. The broader telecommunications equipment market still faces lumpy spending from carriers, and Nokia faces intense competition from Sweden's Ericsson (ERIC). Integration of the recently acquired Infinera and the consolidation of Nokia Shanghai-Bell also present execution risks that could pressure margins.
The Argus upgrade adds another bullish voice to the Nokia turnaround story, giving investors a new $15 price target to watch. The key catalyst will be Nokia's Q2 results on July 23, which will need to confirm that the AI-driven growth in its Network Infrastructure division is accelerating as expected.
This article is for informational purposes only and does not constitute investment advice.
