Morgan Stanley has raised its price target on Nokia to €14 per share from €11, reiterating the Finnish telecoms equipment maker as its top pick.
The stock has surged more than 100% year-to-date. The bank sees Nokia benefiting from the surge in data center spending driven by AI and cloud expansion.
Nokia's transformation into a supplier of data center optical networking equipment is the central driver of the stock's re-rating, Morgan Stanley says.
Nokia's AI and cloud revenues stood at just €1.1 billion in 2025, well below peers. The bank views this gap as an opportunity.
"Potential new orders can have an outsized effect on the absolute revenue figure," analysts led by Terence Tsui wrote.
Nokia's revenue guidance upgrade to 18-20% in its optical and IP networks unit has been a key catalyst. Morgan Stanley's own forecast is 21% growth.
The bank sees 2028 operating profit at €3.65 billion, above company guidance.
Nokia also benefits from scarcity value as a Western supplier of critical infrastructure.
Upcoming catalysts include Ciena's results on June 4, potential hyperscaler partnerships, and a possible entry into the Euro Stoxx 50 index in September.
