Nokia Calls
NOK
The Trade
3000 of the Jan 2027 $20 calls were bought for $1.40 each.
Here’s why that’s not as crazy as the strike makes it look.
The Bull Case
1. Nokia is no longer “Nokia.” It’s an AI infrastructure stock that happens to make telecom gear.
The market has spent the last six months figuring this out. NOK was at $4.00 a year ago. It closed at $13.42 yesterday. Three things rewired the narrative:
The NVIDIA $1B investment (October 2025). They took a $1 billion equity stake. Jensen Huang publicly called the underlying telco compute opportunity a potential multi-billion-dollar business. T-Mobile US is the first operator partner; trials begin this year.
The Infinera acquisition. Closed February 2025 for €2.5 billion. This is what reset Optical Networks from a sleepy commodity business into the actual growth engine. In Q1 2026, Optical grew 20% with book-to-bill well above 1.
Q1 2026 results (April 23). This is the quarter that broke the dam:
Comparable operating profit up 54% to €281M, beating consensus
AI & Cloud net sales +49% YoY, now 8% of group
€1 billion in new orders booked from AI & Cloud customers in a single quarter
Network Infrastructure full-year growth guidance raised from 6–8% to 12–14%
Optical and IP Networks combined raised from 10–12% to 18–20%
Free cash flow €629M, net cash position €3.8B
Guidance raises of that magnitude are how multiple expansion happens.
2. The Lockheed Martin defense pillar
On May 5, Nokia Federal Solutions and Lockheed Martin launched a modular, open-architecture 5G solution for the U.S. Department of War, built into the CMOSS standard for plug-and-play integration across military vehicles. This is a follow-on to the 2025 collaboration, but the language has changed. They’re explicitly moving from concept to deployable reality and pitching it to NATO partners.
What this matters for: defense communications is a structurally higher-margin, longer-cycle revenue stream than carrier RAN. It’s also a category the market currently assigns to LMT, RTX, and pure-play defense names, not to a Finnish telecom vendor. If Nokia gets even a fraction of multiple credit for this segment, the re-rating story isn’t done.
3. Analyst targets are still catching up to the tape.
The stock blew through every consensus target on the way up. Aggregated analyst PTs sit around $10–12. But the post-Q1 revisions show where the smart desks are going:
Argus: Buy, $15 PT
JPMorgan: PT raised to €12 (was €6.90)
Morgan Stanley: PT raised to €11 (was €8.50) — Buy
Barclays: PT raised to €8 (was €5.20), but still Underweight
Bank of America: Buy, $12.70
The ranges are still all over the place, which is what happens when the fundamental story is being repriced quarter to quarter. If the next earnings cycle delivers another guidance raise, $15–17 PTs are not aggressive.
4. M&A optionality (the unstated tail).
Nokia is now a strategically valuable asset to NVIDIA, Lockheed Martin, and arguably any U.S. hyperscaler that wants vertical integration into network infrastructure. NVIDIA already owns ~$1B of the equity.
Bottom Line
The 3,000-contract Jan 2027 $20 call print is a real institutional bet that the AI-RAN re-rating still has runway. The fundamental backdrop supports it: Q1 2026 was a guidance-raise quarter, the NVIDIA partnership is structural, and the Lockheed defense pillar is a new optionality nobody was modeling six months ago.