$NOK - I've been holding this "dead phone company" for over a year and I'm not selling
Been holding Nokia for over a year while everyone told me I was bagholding a Nokia from 2003. Turns out I wasn't wrong, just early. Let me explain why I'm still not selling and why I think most people still haven't figured out what this company actually is now.
First, forget everything you think you know about Nokia
Yes they made phones. Yes they got destroyed by the iPhone. That was literally 18 years ago. The company you're looking at today builds the physical infrastructure that AI runs on. Different business, different management, different thesis entirely.
The problem is the name. "Nokia" still makes people think of a brick phone with Snake on it. That mental image is actively keeping the stock cheap and I'm fine with that for now.
The PE setup
Current PE is around 95, forward PE at 33, stock sitting around $15-16.
Here's where it gets interesting. The old comparable for Nokia was Ericsson — trading at 17x. Boring telecom equipment. Fair enough.
But Nokia just bought Infinera and is repositioning as optical and AI infrastructure. New comparables are Ciena (216x PE) and Arista Networks (54x PE). Those are the names the market pays up for because they're AI infrastructure plays.
Nokia is sitting in no man's land right now, priced like a telecom vendor, quietly becoming an AI infrastructure company. When the market figures out which bucket to put it in, the multiple rerates.
Conservative end at Arista's 54x? That's roughly $27. And that's the boring outcome.
They're spending €4.9 billion a year on R&D
That's roughly 20-25% of revenue going straight back into future tech. Most people look at Nokia's 3-4% net margin and think the business is weak. It's not, they're choosing to reinvest almost everything.
If they stopped R&D cold tomorrow the net margin would jump to somewhere around 27-28%. This is a profitable business running a long game, not a struggling one.
They own Bell Labs. 100 years of fundamental research. 20,000+ patents. The licensing division alone prints money regardless of what happens with equipment sales.
The defence pivot nobody is talking about
Nokia Federal Solutions exists specifically to serve the US government. They're deploying private 5G networks for defence applications, think secure battlefield communications, not your phone signal.
Current partners: US government, Lockheed Martin, NVIDIA (who dropped $1 billion into Nokia as a strategic investment), Motorola Solutions for UK defence.
Defence contracts are sticky, high margin, and not subject to the pricing wars that kill telecom equipment margins. This is early innings.
Huawei is getting banned everywhere and there are only two Western alternatives
Nokia and Ericsson. That's it. That's the entire list of companies that can build full 5G/6G infrastructure at scale without being a national security risk.
Germany is ripping Huawei out by 2026. UK by 2027. The US has been locked for years. Every country that kicks Huawei out needs someone to replace them. There are two options. Nokia is one of them.
Western governments need Nokia to exist and win. That's not a thesis, that's geopolitics. The EU and US are not going to let the only Western 6G vendor die.
6G and AI-RAN, the part with no price target
Nokia and NVIDIA are putting AI processing directly inside the radio tower hardware. Not in a cloud server somewhere, in the actual antenna. The tower itself runs AI models, makes real time decisions in microseconds, optimizes coverage and bandwidth on the fly.
6G specs get finalized 2028. Commercial deployment 2029-2030.
If AI-RAN works at scale Nokia stops being just an equipment vendor and starts being an AI infrastructure platform with a completely new revenue model. No comparable exists. Can't put a number on it. Either it's transformative or it isn't.
What is AI-RAN actually mean?
**In simple terms: it's t