This Trump Photo Could Be Worth Millions

Hey there, bargain hunter. Nokia just handed in one of the most interesting quarterly reports in the European tech sector this year, and the market has spent months treating this company like a relic. Let’s look at the numbers first, then figure out what they’re actually worth.

Scoreboard

Nokia reported net sales of €5.154 billion for the quarter, a 10% rise from a year earlier on a reported basis, or 9% on a constant-currency basis. That topped consensus by roughly €90 million. Operating profit increased 35% to €605 million from €448 million a year earlier on a comparable basis. Comparable diluted EPS of €0.09 beat expectations by around €0.03.

The Real Reason

The market expected a slow-grinding telecom equipment cycle. What it got instead was a data-centre networking surge. AI and Cloud emerged as Nokia’s fastest-growing customer segment, with quarterly revenue increasing 126% to €631 million from €279 million in Q3 2025. Orders from AI and cloud customers rose 118% to €1.5 billion during the quarter. That is not a rounding error. It is a business transformation showing up in the income statement for the first time at meaningful scale.

What the Business Actually Does

Nokia’s Network Infrastructure segment is the piece worth isolating here. It sells optical transport gear, IP routing equipment, and fixed-line infrastructure to carriers, hyperscalers, and enterprises. The segment, which consists of Optical Networks, IP Networks, and Fixed Networks, is positioned to capitalize on the rapid global AI and data-centre build-out while continuing to serve its telecom customer base. The rest of Nokia, Mobile Infrastructure and Portfolio Businesses, is the legacy weight the market keeps pricing in.

Data Section

• Network Infrastructure did most of the heavy lifting, with sales growing 15% on a constant-currency basis, powered by a 43% jump in IP Networks and an 18% gain in Optical Networks.
• Comparable operating margin improved 220 basis points to 11.7%, supported by higher revenue and operating efficiency.
• For January through September 2026, Nokia generated revenue of €14.402 billion, up 7%, while comparable operating profit rose 31% to €1.340 billion.
• CEO Justin Hotard kept the full-year outlook unchanged. Nokia still expects comparable operating profit of €2.1 to €2.6 billion for 2026.
• The company also expects Network Infrastructure to grow 12% to 14% for the full year.

Is It Cheap?

This is where it gets interesting. NOK closed at $9.25 on October 21, 2026, carrying a forward P/E of roughly 21.56x and a consensus analyst price target of $14.97. Compare that to Arista Networks, which trades north of 37x forward earnings on a similar AI networking growth argument. Nokia’s Network Infrastructure segment alone is running at an annualised revenue run-rate well above €8 billion and accelerating. Compared to AI peers like Arista at over 45x, Nokia’s re-rating remains in its early stages, and it trades at a discount to Cisco, leaving room for further multiple expansion as profitability gaps close. The telecom legacy dragged the multiple down. The question is whether Network Infrastructure, if priced separately at even a modest growth-company multiple, already covers the current share price and leaves the mobile business essentially free.

The valuation gap is not unique to Nokia. Broadcom’s AI revenue grew 221% while the stock sat 26% below its high, a parallel case of the market discounting an AI networking business faster than the income statement could confirm it.

Bull / Base / Bear

Bull: AI capex from hyperscalers continues to surge, the Infinera integration stays on track and adds optical interconnect capacity, and Nokia’s IP Networks segment sustains 40%-plus growth into 2027. The stock re-rates toward 25 to 28x forward earnings.

Base: Network Infrastructure grows 12% to 14% as guided. Mobile Infrastructure stabilises. Operating margins drift toward 13% by year-end 2027. The stock closes the gap to $13 to $14.

Bear: Competitive intensity continues at a high level as some competitors seek to take share, and changes in customer network investments related to AI and data-centre growth slow the order book. Margins compress. The legacy mobile segment drags and the re-rating stalls.

The bear case depends on hyperscaler capex slowing. AWS margin expansion while absorbing the largest infrastructure buildout in Amazon’s history suggests the spending cycle has more runway than the bears assume.

Action Plan

If you own it, hold. The Q3 report confirms the AI inflection is real and showing up in revenue, not just orders. If you are building a position, the pullback from the June 2026 high near $17 to the current $9 range represents a more defensible entry than chasing the spring surge. Scale in on two tranches: one now, one on any further weakness toward $8. Set a review trigger if full-year comparable operating profit comes in below €2.1 billion.

Cheap Investor Checklist

• AI and Cloud quarterly revenue: target sustained above €600 million per quarter
• Network Infrastructure margin: watch for progression above 12% comparable operating margin
• Order intake: €1.5 billion in Q3 must hold or grow in Q4 to confirm the cycle
• Infinera integration: on track to be completed by end of 2026; any slip is a yellow flag
• Full-year comparable operating profit: floor is €2.1 billion, midpoint is €2.35 billion
• IP Networks growth: needs to stay above 30% year-over-year to justify re-rating
• Free cash flow: year-to-date free cash flow is €1.238 billion; watch for Q4 conversion
• Competitive response from Arista and Cisco in optical and IP routing

Bottom Line

If Nokia’s Network Infrastructure segment sustains 15%-plus growth and the AI and Cloud order book keeps compounding, the stock at $9 is pricing in a business that no longer exists. The legacy telecom discount is real, but it is shrinking one quarter at a time. Watch the Q4 order intake. That number will tell you whether Q3 was a step-change or a lucky quarter.