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What has to happen in IP Networks

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This page changes IP Networks inside the complete NOK model. Every other vertical, corporate programme and valuation assumption stays in the selected portfolio case.

NOK forward model
Horizon
Consolidated fair value €11.23 all other verticals held in this portfolio case
Final-quarter revenue €1.41B 20% of company revenue
Explicit segment contribution €2.84B EBITDA less segment capex, before corporate items

The AI and cloud order book converts on management's own schedule and the new capacity arrives to meet it. Q2 2026 order intake was EUR 2.8 billion, net sales to those customers doubled to EUR 446 million (+105% constant currency), Optical grew 20% and IP 16%, IP order intake growth was particularly strong on Q1 design wins, and Nokia states the constraint is supply rather than demand - which is why the San Jose fab ramps in Q4 2026, Pennsylvania test and packaging goes up 10x from Q3 2026 and the NXP Chandler campus is under a definitive agreement. Here Optical and IP each run a point a quarter faster, the three Network Infrastructure lines carry 3.4 points more margin - which takes the segment's 2028 operating margin to about 17%, the top of its 13-17% target - and the exit is 13x on an 8.5% discount rate. It is worth EUR 11.23 a share.

IP Networks

Basis quarter€679M
Final quarter€1.41B
Implied CAGR+16%
Final revenue mix20%

IP routing and data-centre switching. Net sales grew 16% on a constant-currency basis in 2026 Q2 with, in Nokia's words, strong growth from AI and Cloud partially offset by a decline from Telecommunication Providers - two customer bases moving in opposite directions inside one reported line.

Last four quarters
2025 Q3 €578M Reported
2025 Q4 €783M Reported
2026 Q1 €626M Estimated
2026 Q2 €679M Reported
IP routingData-centre switching
Sequential growth +3.7%/qtr decaying toward +1.7% Deseasonalised Q2'25-Q2'26 trend, 3.7%/qtr; cross-checks the disclosed +16% constant-currency year on year.
IP Networks

Latest: €1.41B (2031Q2E)

Period Value
2025Q1 €646M
2025Q2 €588M
2025Q3 €578M
2025Q4 €783M
2026Q1 €626M
2026Q2 €679M
2026Q3E €711M
2026Q4E €994M
2027Q1E €777M
2027Q2E €810M
2027Q3E €843M
2027Q4E €1.17B
2028Q1E €912M
2028Q2E €947M
2028Q3E €982M
2028Q4E €1.36B
2029Q1E €1.05B
2029Q2E €1.09B
2029Q3E €1.13B
2029Q4E €1.56B
2030Q1E €1.21B
2030Q2E €1.25B
2030Q3E €1.29B
2030Q4E €1.77B
2031Q1E €1.37B
2031Q2E €1.41B

Assumptions & reasoning

  • The telecom-provider half of this line is declining while the AI and cloud half compounds, and Nokia publishes no split between them - the single 3.7% trend rate is the net of two opposite movements.
  • Margin is the Network Infrastructure parent rate, as for Optical and Fixed; Nokia's Q2 2026 segment note gives one gross profit, one operating profit and one depreciation figure for the whole segment.
  • 2026 Q1 is derived as first-half less the disclosed second quarter: 1 305 - 679 = 626, part of the three-line sum that reproduces the recast segment total exactly.
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