Nokia Oyj ADR NOK

Nokia’s Shift Towards Data Centers Looks Prudent Given Mobile Network Headwinds

Nokia is fundamentally a networking equipment provider, primarily serving wireless carriers and data centers. The firm operates globally but primarily competes in Western-aligned markets where government restrictions have excluded Chinese competitors. We expect minimal growth in mobile networking, given high customer bargaining power and technological threats, with demand from hyperscalers for optical networking driving most revenue growth over the next several years. The overall magnitude of growth depends largely on the success of artificial intelligence firms in monetizing their investments.