Nokia (NOK) Stock May Be 24% Undervalued After AI RAN Progress

Nokia Oyj has seen its share price move sharply in recent years, which naturally raises a question for anyone looking at the stock today. Do the cash flows that Nokia can generate over time support the current valuation implied by a last close of US$10.68?

• Over the past 3 years, Nokia has delivered a share price gain of about 192.1%, which puts real weight on whether that rise is grounded in the cash the business can produce.
• Recent partnerships around AI driven radio access networks, edge computing and defense connectivity can shape expectations for future cash inflows, as they affect how quickly Nokia may convert its technology portfolio into revenue and longer term contracts.
• If you'd rather focus on earnings, this one's for you. See why Nokia Oyj's 74.7x P/E tells a different valuation story.

The issue now is whether Nokia's current market price is justified by its cash flows when assessed against an intrinsic value estimate based on a Discounted Cash Flow (DCF) model.

If you want to stress test Nokia Oyj's valuation question against a wider set of AI focused infrastructure players, run the same cash flow lens across 89 AI infrastructure stocks.

Is Nokia Oyj Still Cheap on Cash Flow?

The Discounted Cash Flow (DCF) model used here looks at the cash Nokia Oyj can return to shareholders over time and then discounts those amounts back to today. On this view, the company is valued using a 2 Stage Free Cash Flow to Equity approach, with last twelve month free cash flow of about €557.2m as the starting point and building up to projected annual cash flows in the low €bn range later in the next decade. Those projections assume Nokia is growing free cash flow from its current base rather than shrinking it.

The DCF outcome suggests Nokia Oyj’s projected cash generation supports an intrinsic value meaningfully above the current share price of $10.68. Nokia’s recent push on AI driven radio access networks with NVIDIA platforms helps explain why the model leans on rising cash flows, because it ties the networking portfolio more directly to higher value software and services. That mix of maturing free cash flow and AI infrastructure exposure underpins the gap between the DCF estimate and where the stock trades today. Find out what Nokia Oyj could be worth using our Discounted Cash Flow (DCF) estimate.

The Nokia Oyj Narrative: What Would Justify Today's Price?

Nokia Oyj's valuation gap raises a simple question for investors. What kind of future would have to play out for this stock to be worth materially more or less than today's price based on cash generation, profitability and risk? Simply Wall St Narratives on the Community page set out those competing views, and each one links its number to a clear view on where growth, margins and potential setbacks could head next so you can revisit the thesis as fresh information comes through.

A written, numbers-driven view on Nokia Oyj gives you a clear framework for setting expectations on how cash generation might respond to AI RAN rollouts, defense connectivity work and edge computing partnerships, and then checking those assumptions against actual outcomes. As fresh news emerges, such as AI-native network projects on NVIDIA platforms or new defense and enterprise agreements, that narrative can be updated so you can assess whether the original cash flow story still holds together or needs to be reconsidered.

Share your own Narrative for Nokia Oyj and set out the assumptions behind your valuation.

One more angle on Nokia Oyj that could shift your view

Cash flows tell only part of the Nokia Oyj story, because the people setting priorities and how they are rewarded can tilt risk and reward in very different directions for shareholders. See who runs Nokia Oyj and how they are paid.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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