The optical market is heating up, and Nokia’s San Jose factory is set to open later this year, which, according to David Heard, will increase Nokia’s optical capacity by up to 20-fold. Quoted from the report:
“We are also starting production on schedule later this year at our new indium phosphide production facility in San Jose, California.”
So the question now is whether Nokia’s operating profit this year is in any way indicative of the future and, consequently, of Nokia’s “true” valuation. In my opinion, it is very poor, if profit grows significantly from next year onwards, especially in the second half as Nokia’s new products hit the market:
“At the OFC optical industry conference held in March, we announced new innovations in optical networks designed to meet the increasing scale and performance requirements of AI workloads. We announced four new digital signal processors enabling 13 new solutions. These support the deployment of new applications and reduce our customers’ total cost of ownership by up to 70%. Sampling will begin in mid-2027 and mass production will start during the second half of 2027.”