Nokia is ploughing ahead on two continents to cement its role in the artificial-intelligence infrastructure boom, even as some analysts signal that the stock’s dizzying ascent has left little room for error. The Finnish telecom-equipment group is channelling fresh capital into US chip production while forging a data-centre alliance in Southeast Asia, yet a growing chorus of caution suggests investors may be demanding proof of profitability before driving the shares higher.
Svenska Handelsbanken downgraded the stock to “Hold” from “Buy” this week, even as it lifted the price target to €12 from €10.20. The message is blunt: the upside from here is limited. Barclays, meanwhile, keeps a “Sell” recommendation, raising its target only marginally to €8.50 — well beneath the current level. The broader market consensus, based on 23 analysts, stands at €10.45, a figure that underscores how far the equity has run ahead of fundamental estimates.
From 104% gain to a cooling momentum
The scepticism is hardly surprising given the trajectory. Nokia’s shares opened the year at roughly €5.60 and surged to around €11.37, a gain of 104% before a recent pullback. In the primary article from a day later, the stock added another 3% to close at €11.68. Even after that bounce, the equity remains about 18% below the peak it touched last month, and it briefly dipped under the 50-day moving average — a technical signal that often flags waning short-term momentum.
The rally has been fuelled almost entirely by enthusiasm for Nokia’s role in AI networking and telecom infrastructure. But with the stock now trading above the consensus target, the market is shifting its focus to tangible earnings delivery. The next quarterly report will be the proving ground.
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Betting big on US chips and Asian data centres
None of this has deterred management from spending heavily to capitalise on the AI wave. On the hardware side, Nokia is investing $30 million in its Allentown, Pennsylvania, facility to produce advanced photonic chips for optical modules. The workforce there will expand to more than 500 employees. This is part of a broader multibillion-dollar commitment: the company plans to funnel $4 billion into US research and production over several years. The current project receives $10 million from the federal CHIPS programme, supplemented by regional incentives.
Across the Pacific, Nokia is building a data-centre alliance with partner Comin Asia, targeting emerging markets such as Cambodia and Laos. Laos, which enjoys surplus power capacity, is seen as an ideal location for energy-intensive AI workloads. The two partners are designing modular, on-premises facilities that allow local businesses and governments to keep data within their borders, bolstering digital sovereignty. Thailand is also on the list, though there the companies must navigate stricter regulatory requirements and a strained electricity grid.
A tale of two expansions
The dual-track strategy — securing chip supply in the US while opening new sales frontiers in Southeast Asia — positions Nokia for the next phase of the AI boom. The in-house chip production in Allentown hardens supply-chain resilience, while the Asian alliance taps markets beyond the established tech hubs.
Yet the stock’s recent volatility shows that investors are weighing those long-term bets against near-term valuation risk. Until Nokia can demonstrate that its operating numbers justify the current price, the consolidation phase looks set to persist. The Handelsbanken target of €12 marks a ceiling that the shares are probing but have not yet broken. If earnings disappoint, the Barclays target of €8.50 could suddenly look less pessimistic.
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