Morgan Stanley has upgraded its recommendation for the Finnish telecom company Nokia to overweight from equal weight, along with a new higher price target of 6.5 euros (previously 4.2). This suggests a potential upside of 15 percent from the most recent closing price.
The analysis highlights how the market appears to be underestimating the company's exposure to data centers, according to Bloomberg News.
Currently, AI and cloud revenues account for just 6 percent of the group, but a boom in data centers is fueling rapid growth.
Despite this and the stock's strong recent performance, Nokia is still valued in line with historical levels prior to other technology cycles and does not fully reflect the shift towards AI, Morgan Stanley argues.
According to Bloomberg, most analysts are positive about Nokia, with 17 buy, 7 hold, and only 6 sell recommendations.
Nokia Oyj specializes in the design, production and marketing of telecommunications equipment. Net sales break down by activity as follows:
- development of mobile broadband network solutions (40.2%): aimed in particular at telecommunications operators. In addition, the group offers professional services (network planning and optimization, systems integration, installation, implementation and maintenance of telecom networks);
- development of network infrastructure solutions (33.9%): IP routers and optical networking solutions.
- software development (15.7%): software for customer experience management, network operations and management, communication, collaboration and billing, IoT solutions and cloud management platforms;
- development of advanced technology (10%);
- other (0.2%).
Net sales are distributed geographically as follows: Europe (33.1%), North America (28%), India (7.1%), China (5.9%), Asia/Pacific (10.6%), Middle East and Africa (10.6%) and Latin America (4.7%).
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