Morgan Stanley Picks Nokia as Top Stock on AI Infrastructure Demand

LootboxPhobia · 2026-03-12T20:32:56+00:00

Investing.com - Morgan Stanley raised Nokia's price target from €6.50 to €8.50, maintaining an overweight rating, citing growing artificial intelligence infrastructure demand strengthening the company's growth prospects.The brokerage stated that the new price target reflects its previous bull case scenario, as spending on cloud computing and AI data center networking is accelerating.Use InvestingPro to track every price target and rating changeMorgan Stanley said that optical networking peer Ciena's recent results reinforced expectations that demand related to data center connectivity is surging sharply.Ciena reported strong growth in cloud-related revenue, and the brokerage stated this supports the view that Nokia's own optical networking and IP segment revenue prospects may be conservative.Nokia's revenue growth guidance for this segment is 10%

LootboxPhobia

2026-03-12 20:32:56

Investing.com - Morgan Stanley has raised Nokia’s target price from €6.50 to €8.50 and maintained an overweight rating, citing growing demand for AI infrastructure as enhancing the company’s growth prospects.

The broker stated that the new target price reflects a previous bullish scenario, as spending on cloud computing and AI data center networks is accelerating.

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Morgan Stanley said that recent results from optical network peer Ciena have reinforced expectations that demand related to data center connectivity is surging.

Ciena reported strong growth in cloud-related revenue, which the broker says supports a more optimistic outlook for Nokia’s own optical and IP division’s revenue prospects.

Nokia’s guidance for this division’s revenue growth is 10% to 12%, but Morgan Stanley forecasts a growth rate of about 13% in 2026. The firm expects optical network revenue to grow over 20%, driven by demand from hyperscale data center operators.

Although AI and cloud-related businesses account for only about 6% of Nokia’s total revenue, the broker says this segment is growing rapidly and helping the company offset the impact of slowing telecom operator spending.

Morgan Stanley noted that investors should watch for several recent potential catalysts, including announcements at the Optical Fiber Communications Conference scheduled for March 15-19. The firm said this event could provide the latest updates on Nokia’s optical network strategy and potential partnerships with hyperscale cloud companies.

Nokia has also partnered with Microsoft to supply network equipment for its Azure data centers and is collaborating with NVIDIA on AI network technology.

Morgan Stanley also raised its valuation assumptions, increasing the target multiple of expected operating profit from 10x to 14x. The broker said the higher multiple reflects Nokia’s increasing exposure to the faster-growing data center connectivity market.

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