Nokia's strategic shift to prioritize artificial intelligence and cloud-based network infrastructure is creating a sharp divide among Wall Street analysts. While the Finnish telecom giant is capturing new revenue from the AI boom, some investment banks remain unconvinced. In a February 2026 note, Goldman Sachs maintained its 'Sell' rating on Nokia, even while slightly increasing its price target to €3.50 from €3.30. The firm had previously cited concerns around valuation and execution risks in its Network Infrastructure segment.
This skeptical stance contrasts with more bullish outlooks that followed Nokia’s recent earnings reports. JPMorgan, for instance, raised its price target in February 2026, maintaining an 'Overweight' rating, while Grupo Santander upgraded the stock to 'Outperform'. These analysts point to the success of Nokia's pivot, which includes the acquisition of optical networking firm Infinera to better serve the massive data transfer needs of AI data centers. The company's Network Infrastructure unit has become its primary growth engine, with management targeting a 6-8% compound annual growth rate for the division through 2028.
Nokia's strategy aims to capitalize on what its executives call the 'AI supercycle,' focusing on high-growth areas like optical networks and data center switching. The company has reported rising sales to cloud and AI customers, demonstrating tangible progress. However, the market appears focused on whether this new growth can offset challenges in its traditional mobile networks business, which has faced headwinds.
Investors are now closely watching for further proof that the AI-centric strategy can deliver sustained profitability. The key tension is between the company's successful pivot into a high-growth sector and lingering skepticism from influential analysts like Goldman Sachs about the pace and profitability of this transformation.
ISN MEDIA
