Well done, Nokia!
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Thank you Nokia and everyone at Nokia. You met market expectations well.
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That AI is going to rise even more than 27%, just you wait. Those who are just looking at these figures now will be left behindâthis has already happened to many. Nokiaâs stock is in a good light now; the negativity has vanished. In America, theyâre buying Nokia now and selling other AI stocks because Nokia is cheap compared to them.
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Nokiaâs Q1 results were good, then, and better than analystsâ low expectations. Promises of future development years down the line (medium and long term) are manna to the markets. Gross margin already grew significantly, but the improvement hasnât quite reached the bottom line yet due to growing investments. Based on pre-market quotes, the stock seems to be solidly in the greenâitâll be interesting to see what happens when higher volume hits the market. Itâs worth remembering that analysts are not the same thing as the marketâs view.
Below are a few headlines, and for the most part, the coverage is very positive.
âNokia Oyj reported first-quarter adjusted profit that beat analyst forecasts, as its push into artificial intelligence and cloud infrastructure begins to pay off.â
âThe Espoo, Finland-based â group said ânet sales from AI âand cloud customers climbed 49%.â
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Nokia Oyj (NOK) Reports First Quarter Earnings: Strong EPS but Revenue Target Missed
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Investment recommendations will soon start rising again, giving the stock more boost.
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Yeah, Nokia has always managed to blow its money on R&D and restructuring costs.
Iâm still skeptical even though the share price is now clearly up and over nine.
This wonât change overnight.
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Once again, you can see that Nokia isnât trusted and its stock value is viewed negatively; fortunately, the global market is for once of a different opinion than the Finnish analysts. The stock is at âŹ9 and people are shaking like a leaf 
. Fortunately, analysts in Finland canât just dig for negativity now, and even if they did, luckily Finland doesnât determine the stock price.
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This is how the rise in asset values, driven by the views of Wall Street analysts, flows into the pockets of US 
savers and investors; they are able to see if the expected value is justified, rather than just fixating on guidance or the valuation provided by current growth. In their analysis, they really turn up the heat for their clients while the iron is hot.
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In a way, itâs also disappointing to see ownership shifting across the pond. I wonât complain too much, though; every investor makes their own decisions
By the way, the new guidance seems to be based on a dollar exchange rate of 1.15. I believe it was 1.18 previously.
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P/E (adj.) (26e) 30.64
EV/EBIT (adj.) (26e) 22.32
P/B ratio (26e) 2.42
EV/S (26e) 2.39
Dividend yield % (26e) 1.74 %
| Revenue growth % | 2.4 % |
|---|---|
| EBIT margin % (adj.) | 4.2 % | |
|---|---|---|
Nokiaâs multiples are starting to look quite steep 
Of course, if you donât look at the valuation but compare it to real AI stocks, then I guess this is cheap even though the percentages are small 
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I canât recall a situation where, just two weeks after a well-reasoned investment decision, Iâd find myself having lost nearly 8,000 euros due to being too hasty, yet still have a wide grin on my face while looking at my portfolios.
This is the Nokia weâve been waiting for over the past few years, and the investment case just keeps getting clearer. To be honest, I was prepared for a disappointment this morningâafter all, I have about seven years of Nokia investment history on my shouldersâbut whatâs to stop this rise now?
Nokia has changed and is undergoing a radical transformation; although it will still take time for expectations to fully materialize, there are already strong signals of it even in the results released today. This still has the potential for almost anything.
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For years, there was a feeling that Wall Street wouldnât let Nokia rise. It was always pushed down to Max Pain. Earnings reports were always a disappointment to the market, even when results were in line with expectations.
Now Wall Street has finally given the green light for a rally, as getting in on the AI boom has opened up a outlook for generating profits.
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Finland has now got a new Nokia. That companyâs name is NOKIA.
YeeeeeeeeeeeeeeeeeâŠ.
YeeeeeeeeeeeeeeeeeeâŠ
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Todayâs rise indicates that the market clearly supports Nokia. Iâll just revise my recommendations upwards; weâre going up and fast now.
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I hope we donât head up too strongly just yet and that a summer dip arrives, so I could buy back the shares I sold too early; I still have 1/3 left, but by acting too hastily and remembering previous earnings reports, Iâve ended up in the same situation as @OldFek, missing out on tens of thousands. Iâve only recently realized that this is no longer just a company providing networks for operators, but has transformed quite rapidly into an AI-network-datacenter player with a broad portfolio for these purposes. I also agree that technological factors alone donât explain the rise; Nokia has joined the machine learning crowd, from which much is truly expected and which has the promise to rise. Previous fundamentals no longer explain the share price levels, nor can they be used to do so. Iâm still well in the green myself, but of course, itâs worth looking at other stocks with the proceeds from the sold Nokias.
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I myself hope that the analyst wonât actually screw up the target price just because the stock is high. Of course, this was also seen during the bull runs of the corona era, that when the target price was met, a couple of euros were added and the multipliers were stretched 
Nokiaâs stock price is completely detached from the companyâs development at the moment. The stock is fully priced and cannot withstand the slightest dip or flat development without a significant drop.
The target price is a sum within 12 months calculated with reasonable multipliers. You can always stretch the multipliers as you wish, but with 2.4% revenue growth and 4.2% operating profit, itâs not a âto the moonâ stock.
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If Nokiaâs value is completely out of balance right now, I wonder what you think the fair value of Nokiaâs stock is now?
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Thinking about what I would consider an acceptable price to pay 12 months from now, it would be around âŹ6.5â7.2. Even at those prices, the P/E would be in the 19â21 range, assuming an EPS of âŹ0.34 for this year. However, Q1 EPS was only âŹ0.02, so there is plenty of catching up to do for the rest of the year. That P/E of ~20 and âŹ0.34 EPS already prices in a fair amount of optimism.
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The optical market is heating up, and Nokiaâs San Jose factory is set to open later this year, which, according to David Heard, will increase Nokiaâs optical capacity by up to 20-fold. Quoted from the report:
âWe are also starting production on schedule later this year at our new indium phosphide production facility in San Jose, California.â
So the question now is whether Nokiaâs operating profit this year is in any way indicative of the future and, consequently, of Nokiaâs âtrueâ valuation. In my opinion, it is very poor, if profit grows significantly from next year onwards, especially in the second half as Nokiaâs new products hit the market:
âAt 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 customersâ 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.â
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