Shares surged as two catalysts landed in quick succession: Goldman Sachs dropped its longstanding "sell" rating and Nokia locked in a major UK wireless contract. The +4.2% pop to $8.62 defied a sliding S&P 500 and rising geopolitical anxiety, pushing Nokia within striking distance of its 52-week high of $8.82. For a stock that traded at $4.00 a year ago, the question is whether the fundamentals have truly caught up to the price.
Goldman Finally Stops Betting Against the Stock — But Isn't Exactly Bullish
Goldman Sachs upgraded Nokia from Sell to Neutral and more than doubled its price target from EUR 3.50 to EUR 8.00. The move removes a major overhang — Goldman had been one of the most prominent bears. The upgrade reflects optimism about Nokia's growth in optical and data-center networking, which Goldman believes will benefit from AI infrastructure spending. But "neutral" still means "hold," not "buy." Nokia now trades at roughly 17x two-year forward earnings, a ~10% premium to the European tech sector versus a historical ~40% discount. Translation: the easy catch-up gains may already be priced in.
A Big UK Win, but Nokia Still Shares the Pie
Nokia was selected by Virgin Media O2 for a multi-year 5G network deployment across the UK, extending a partnership spanning more than two decades. The deal covers thousands of cell sites with next-generation radio equipment. But investors should note: the network will be split roughly 55/45 between Ericsson and Nokia , so this reinforces Nokia's position without displacing its chief rival.
AI Networking Orders Are Real, but the Core Radio Business Remains Flat
Nokia ended 2025 with an order backlog of approximately EUR 2.5 billion from AI and cloud customers — a genuine bright spot. Yet Goldman still sees limited growth in Nokia's traditional wireless radio business due to a flat global equipment market.
Mobile infrastructure now represents about 30% of Nokia's revenue, down from roughly 50% historically , showing the company's pivot — but also shrinkage in its legacy bread-and-butter.
The Valuation Leaves Little Room for Disappointment At a P/E ratio of 61x trailing earnings and a $45.7 billion market cap, Nokia's most recent quarter missed analysts' expectations, posting $0.16 EPS versus $0.17 expected, with revenue of EUR 6.13 billion versus EUR 7.1 billion anticipated. Two positive headlines in one week don't erase a revenue miss of nearly a billion euros. Nokia's AI-networking pivot is promising, but at this price, shareholders are paying for a future that still needs to show up in the income statement.