Nokia Targets 60% Profit Lift by 2028 as It Rolls Out AI‑Ready Networks -( $NOK $NVDA $SPY )

Nokia (NOK) is promising investors a sleeker, AI‑age version of itself by 2028, aiming to lift profits by as much as 60% while quietly admitting that the road there runs through a restructuring zone. The market, in classic fashion, responded to this vision of future riches by sending the stock currently lower on the day, but is currently up +45.54% over the last year at $6.04.

Big profit promises, modest patience

By 2028, Nokia wants to grow its comparable operating profit to a range of roughly €2.7 billion to €3.2 billion, up from about €2.0 billion over the last 12 months—a target that sounds ambitious until one remembers how many network cycles the company has already lived through. The goal implies a potential profit boost of up to about 60%, built on higher-margin network gear and tighter cost control rather than a sudden global love affair with telecom capex.

Two segments, one makeover

To get there, Nokia is stripping its structure down to two primary operating segments—Network Infrastructure and Mobile Infrastructure—starting in 2026, a move executives say will sharpen focus and speed decisions as AI and data centers soak up ever more bandwidth. Several smaller units, from fixed wireless CPE to microwave radio, are being shunted into “portfolio businesses” pending strategic decisions, corporate code for “for sale, to be partnered, or put on a strict performance diet.”

Chasing the AI supercycle

The official strategy now revolves around the “AI supercycle,” with Nokia pledging to accelerate growth in AI and cloud, lead the next era of mobile connectivity with AI‑native networks and 6G, and co‑innovate with customers who increasingly look more like hyperscalers than legacy phone companies. Network Infrastructure is expected to grow net sales at a 6–8% annual clip from 2025 to 2028, with optical and IP networks targeted for a double‑digit growth rate as data centers demand fatter, faster pipes.

Margins, KPIs and a skeptical Street

On the numbers, Nokia is aiming for a 13–17% operating margin in Network Infrastructure and a 48–50% gross margin in Mobile Infrastructure by 2028, while cutting group “common and other” operating expenses to €150 million from about €350 million. Analysts, however, have already flagged the 2028 targets as underwhelming, a reminder that investors have grown used to confident long‑term plans from gear makers and slightly less confident delivery, particularly when mobile networks are still digesting prior 5G splurges.

From networks to narrative

For now, Nokia’s story is that of a once‑ubiquitous consumer brand recasting itself—again—as the quiet plumbing behind AI‑driven connectivity, hoping investors will pay more for pipes if they are branded “AI‑ready.” Whether the new structure and targets mark the beginning of an AI‑era rerating or just another chapter in Nokia’s long history of reinvention will depend less on slideware and more on whether, by 2028, those promised margins look like engineering reality rather than marketing copy.

By the way, note that Nvidia (NVDA) has made a $1 billion equity investment that secured a 2.9% stake in Nokia….

Big profit promises, modest patience

Two segments, one makeover

Chasing the AI supercycle

Margins, KPIs and a skeptical Street

From networks to narrative

The Sources…

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