Nokia Upgraded to Overweight by Morgan Stanley on Strong AI and Data Centre Demand
In a clear sign of rising confidence from Wall Street, Morgan Stanley has upgraded Nokia’s stock rating to “Overweight”, citing strong demand for artificial intelligence (AI)‑driven networks and data centre infrastructure. This move comes as Nokia’s business shifts toward faster‑growth markets tied to the AI boom and infrastructure build‑outs.
Why Morgan Stanley Upgraded Nokia
- Rating Upgrade: Jan 15, 2026, rating raised to Overweight, price target €6.50.
- AI & Cloud: Growing involvement in AI and cloud network solutions.
- Optical & Data Demand: Rapid growth in AI-driven networks and data centre projects.
- Restructuring: Learner structure after recent acquisitions.
- Strategic Shift: Moving from telecoms to next-gen infrastructure.
AI and Data Centre Demand: The Growth Engines
- Global AI Surge: AI workloads driving data centre upgrades.
- Revenue Share: AI and cloud now contribute about 6% of revenue, increasing roughly 1% each quarter.
- Orders Jump: Optical orders +40% YoY, data centre switches +150%.
- Hyperscale Spending: Microsoft and Google spend more on networks than telecoms.
- Network Needs: AI requires low-latency, high-throughput networks.
Nokia’s Strategic Moves in AI and Infrastructure
- Infinera Buy: Expanded optical and data centre portfolio, 2025.
- Optical Growth: High-capacity transceiver shipments are rising.
- NVIDIA Stake: $1 billion for 2.9%, deeper AI collaboration.
- Market Confidence: Nvidia shows trust in Nokia’s AI potential.
Stock Reaction and Analyst Views
- Share Rise: Positive market reaction to upgrade.
- Jefferies Buy: Upgraded Nokia, citing AI and data centre growth.
- JP Morgan: Maintainsan Overweight rating, strong price target.
- Institutional Support: Multiple brokers see long-term growth.
Industry Context: AI Infrastructure Market
- Global Growth: AI/cloud spending is growing double-digit rate.
- Hyperscale Leads: Data centre upgrades driven by cloud giants.
- Tech Backbone: AI and cloud transport are the fastest-growing segments.
- Market Shift: Supports Nokia’s move to high-growth networks.
Challenges and Risks to Watch
- Competition: Ericsson and Cisco remain strong rivals.
- Cyclic Spending: Telecom cycles may slow legacy growth.
- AI Small Share: AI/cloud ~6% of revenue, growing fast.
- Growth Balance: Need to manage new vs legacy markets.
Conclusion
We see the Morgan Stanley “Overweight” upgrade as more than just a ratings change. It highlights a strategic shift in Nokia’s business model, from traditional telecom services toward high‑growth AI and data centre infrastructure. With strong demand for AI‑driven networks, rising optical network orders, and partnerships with major tech players, Nokia is well-positioned to benefit from the next wave of digital transformation. While competition and legacy market risks remain, the company’s focus on AI and cloud infrastructure could drive sustainable revenue growth and strengthen its market standing in the coming years.
FAQS
Due to strong demand for AI networks and data centre infrastructure, plus company restructuring.
Around 6% of revenue, growing about 1% per quarter.
Acquired Infinera, boosted optical shipments, and partnered with Nvidia.
Nokia shares rose, and other brokers like Jefferies and JP Morgan remain bullish.
Disclaimer:
The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.
