Rosenblatt Starts Nokia at Buy on AI Networking Growth

Rosenblatt initiated coverage of Nokia with a Buy rating and a $15 price target, citing the company’s growing exposure to artificial intelligence infrastructure and strong position in optical networking.

Analyst Mike Genovese said Nokia’s Network Infrastructure business is becoming increasingly well positioned to benefit from the global AI data center buildout. Nokia’s Optical Networks revenue increased 20% year over year in the second quarter of 2026, while revenue tied to AI and cloud customers more than doubled.

AI and Cloud orders reached €2.8 billion during the quarter, with approximately half expected to convert into revenue within 12 months.

Nokia has also gained market share in “scale-across” networking, an important component of AI data center infrastructure that can be difficult for competitors to replace once deployed. The company is expanding U.S. production of Indium Phosphide lasers through facilities in San Jose, Pennsylvania and Chandler, Arizona, strengthening its supply of advanced optical components.

Optical Networks represents about 45% of Nokia’s Network Infrastructure segment and roughly 20% of company-wide revenue. Trailing 12-month sales for the business are approximately $4 billion, putting Nokia broadly alongside rival Ciena.

Rosenblatt estimates the optical data center interconnect market could expand from roughly $12 billion today to between $40 billion and $50 billion by 2030, representing an annual growth rate of around 35%. The scale-across market could provide an additional opportunity exceeding $20 billion by 2030.

Meanwhile, Nokia’s Fixed Networks and Mobile Infrastructure businesses are expected to deliver low-single-digit growth, with profitability supported by cost reductions and AI-RAN adoption. Rosenblatt forecasts Nokia’s operating margin will exceed 15% in 2028, compared with 11.5% in 2026.

The firm’s $15 Nokia price target uses a sum-of-the-parts valuation, assigning about one-third of the company’s value to AI infrastructure and two-thirds to traditional telecom operations. Rosenblatt considers that approach potentially conservative as Nokia’s revenue mix increasingly shifts toward higher-growth AI networking markets.