Rosenblatt has opened coverage of Nokia with a Buy recommendation and a $15 target price, presenting the Finnish equipment maker's optical networking business as a meaningful beneficiary of the ongoing AI infrastructure expansion while the shares trade on valuation metrics common to legacy telecom equipment suppliers.
The broker's analyst, Mike Genovese, highlights a step-up in the company's Optical Networks performance. In the second quarter of 2026, Optical Networks revenue rose 20% year-over-year, and Nokia's AI and Cloud revenue more than doubled over the same period. AI and Cloud orders totaled 08 million in the quarter, with Rosenblatt indicating that roughly half of those orders are expected to convert to revenue within twelve months.
Rosenblatt underscored Nokia's gains in what the firm describes as "scale-across" networking - one of three data center fabric types the analyst considers hardest to displace once implemented. To underpin access to advanced optical components, Nokia is building out U.S. Indium Phosphide laser manufacturing capacity with facilities in San Jose and Pennsylvania, and an additional Chandler, Arizona campus tied to its NXP acquisition.
Within Nokia's Network Infrastructure grouping, Optical Networks represents roughly 45% of that segment and close to 20% of the firm's total revenue. On a trailing twelve-month basis, Rosenblatt measures Nokia's Optical Networks sales at about $4 billion, a figure the firm says is broadly comparable to competitor Ciena, and positions both companies as leaders in data center interconnect and scale-across markets.
Rosenblatt's market sizing places the present Optical DCI market at about $12 billion and projects it could expand at a roughly 35% compound annual growth rate to reach $40 billion to $50 billion by 2030. On top of that existing DCI base, the analyst pegs a potential scale-across total addressable market at more than $20 billion by 2030. Rosenblatt's 2028 estimates assume no contribution from the possible scale-up opportunity, which the firm labels as upside to its forecasts.
For other parts of the business, Genovese describes Fixed Networks and Mobile Infrastructure as low-single-digit growth franchises that management is prioritizing for margin improvement. Rosenblatt cites AI-RAN adoption and cost measures, including a downsizing of China operations, as factors expected to help margins. The broker models operating margins above 15% for 2028, rising from 11.5% in 2026.
The $15 price target is derived from a sum-of-the-parts framework that attributes approximately one-third of Nokia's enterprise value to AI infrastructure exposure and the remaining two-thirds to its traditional telecom operations. Rosenblatt notes that this allocation mirrors the company's current revenue mix and describes the valuation as potentially conservative if the revenue composition continues shifting toward AI-related businesses over time.
Contextual notes
- Optical Networks revenue growth in Q2 2026: +20% year-over-year.
- AI and Cloud revenue: more than doubled year-over-year in Q2 2026.
- AI and Cloud orders in the quarter: 08 million, with ~50% expected to convert within 12 months.
- Rosenblatt's Optical DCI market outlook: current 2 billion expanding to 40-50 billion by 2030 at ~35% CAGR.