Nokia (HEL: NOKIA) is pushing meaningfully higher on Monday morning after receiving a high-conviction upgrade from the Bank of America, which shifted its view from “neutral” to “buy”.
In a research note on April 13th, analyst Oliver Wong raised the price target on NOKIA to €10.7 – indicating potential upside of more than 30% from its previous close.
Nokia stock has already soared over 50% since late January, but Wong believes the following four factors could drive it higher through the remainder of 2026.
Infinera acquisition is a major tailwind for Nokia stock
BofA is primarily bullish on NOKIA shares for the company’s successful integration of Infinera – an acquisition its analyst believes has fundamentally altered the firm’s DNA.
By absorbing Infinera’s high-end optical tech, Nokia has moved beyond “traditional” radio access networks to become a dominant force in the “plumbing” of the internet.
Wong dubbed the transaction the “missing piece of the puzzle” in his research report, adding that this transition is essential as AI workloads demand unprecedented bandwidth.
“It transforms them from a 5G laggard into the premier provider of the optical backplane that the modern world requires to move massive amounts of data.”
Hyperscaler demand to drive NOKIA shares higher
According to Oliver Wong, the generative AI explosion has created a gold rush among US hyper-scalers like Microsoft, Amazon, and Google – all of whom are scrambling to build massive data centers.
BofA sees Nokia shares as uniquely positioned to capture this spending surge, forecasting about a 17% compound annual growth rate (CAGR) for the firm’s Optical Networks unit through 2028.
This shifts NOKIA’s sales mix toward high-margin, recurring software and hardware sales to cloud giants.
“We’re seeing a secular shift where hyperscalers are no longer just customers; they’re the primary architects of global infrastructure, and they’re increasingly choosing Nokia’s integrated stacks,” Wong wrote.
Nokia retains its European advantage
In its research note, the Bank of America Securities also argued that geopolitics continues to play a silent role in Nokia’s favour.
As European nations tighten restrictions on Chinese vendors like Huawei and ZTE due to security concerns, Nokia is effectively the “last man standing” for sovereign-grade infrastructure.
Analyst Oliver Wong highlighted the “replacement cycle” for legacy Chinese equipment in Europe is accelerating, providing a steady tailwind for Nokia’s market share.
“Nokia represents the ‘Trusted Partner’ gold standard in Europe,” he explained, adding the regional dominance provides a defensive moat that shields NOKIA stock from the volatility often seen in the more competitive and price-sensitive emerging markets.
Why Nvidia deal is significant for NOKIA
Finally, perhaps the most exciting long-term catalyst is Nokia’s $1 billion partnership with Nvidia, focused on AI-RAN (Radio Access Network) technology.
This collaboration seeks to turn cell towers into decentralized AI data centers, enabling processing to happen at the “edge” of the network.
BofA believes the market is drastically underestimating the revenue potential of this alliance as 6G begins to enter the conceptual phase.
Wong concluded that the partnership “validates Nokia’s technical prowess,” adding that “working alongside the world’s most important chipmaker ensures Nokia stays at the bleeding edge of how AI and connectivity intersect over the next decade.”
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