Nokia Rises on Lockheed Deal; DeepValue Maintains WAIT Stance

What happened

Nokia shares edged higher Monday as traders reacted to defense-focused optimism surrounding a Lockheed Martin deal, adding a new narrative layer to the company's AI networking push. However, the DeepValue master report rates Nokia a WAIT with a conviction of 3.5, noting the stock at $10.30 already prices in AI-driven upside while AI-RAN commercialization remains back-end loaded to end-2027. The report emphasizes that near-term value hinges on sustained optical/IP order intake from AI & cloud providers and continued multi-year operator extensions, not on defense headlines. With a P/E of 53.7x and EV/EBITDA of 21.3x, the valuation leaves no room for error if AI & Cloud order momentum fades or AI-RAN field trials slip beyond Q4 2026. The Lockheed deal broadens Nokia's addressable market but does not change the core investment thesis, which requires measurable order and free cash flow confirmation in the coming quarters.

Implication

For investors, the Lockheed Martin deal provides a modest new revenue stream but does not alter the fundamental thesis that Nokia's valuation embeds significant AI-RAN optionality that remains pre-commercial. The near-term stock direction still depends on Q2 2026 results under the new segment structure, where AI & Cloud order intake strength must be sustained. The defense business could reduce volatility in Nokia's overall revenue mix, but it is unlikely to move the needle on earnings per share in the next 12 months. Investors should monitor for any acceleration in AI-RAN field trial announcements or a major operator contract win that validates the commercial pathway. The prudent approach is to wait for either a better entry price near $8.50 or tangible evidence that AI monetization is gaining traction beyond press releases.

Thesis delta

The Lockheed Martin deal introduces a defense catalyst but does not shift the core investment thesis, which remains anchored to AI-RAN commercialization timelines and optical/IP order sustainability. The thesis still waits for confirmations: repeat AI & Cloud orders under the new segment reporting and AI-RAN field trial progress in Q4 2026. Until those materialize, the stock's risk/reward is skewed to the downside given its elevated valuation.