We came across a bullish thesis on Nokia Oyj (NOK) on Tiny Stock Ninja’s Substack by Lux Opes Research. In this article, we will summarize the bulls’ thesis on NOK. Nokia Oyj (NOK)'s share was trading at $5.16 as of March 6^th. NOK’s trailing and forward P/E were 15.42 and 15.13 respectively according to Yahoo Finance.

Aerial shot of a communications tower, emphasizing the company's infrastructure networks.

Nokia’s Q4 2024 results exceeded expectations, driven by strong performance in its Network Infrastructure division and a significant boost from its licensing business, Nokia Technologies. North America was a key growth driver, contributing to higher gross margins and reinforcing the company’s optimism heading into 2025. The Network Infrastructure segment, which includes IP, fixed, and optical networks, is expected to continue its strong momentum, while the Cloud and Network Services division is poised for expansion as telecom operators deploy standalone 5G technology. However, Mobile Networks is likely to remain flat due to the loss of a major AT&T contract, which will shave approximately 4% off sales growth.

Despite this, Nokia remains focused on long-term growth, forecasting EBIT between €1.9 billion and €2.4 billion, slightly below market expectations due to a planned €100 million investment in data centers. This strategic move, while putting short-term pressure on profitability, reflects Nokia’s confidence in AI-driven cloud infrastructure as a major growth catalyst in the coming years. The company is also making significant strides in network APIs and data center expansion, both of which are expected to play a crucial role in future revenue generation.

Nokia’s recent acquisitions reinforce its competitive positioning. The purchase of Infinera strengthens its optical networking capabilities, while the acquisition of Rapid’s technology assets enhances its ability to help telecom operators monetize their networks more efficiently. These developments position Nokia well for long-term success, but the key question remains whether the stock’s current valuation fully reflects its future growth potential as it is trading above its historical average.

Nokia Oyj (NOK) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 20 hedge fund portfolios held NOK at the end of the third quarter which was 16 in the previous quarter. While we acknowledge the risk and potential of NOK as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NOK but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.