Nokia Chosen by City of Superior to Build Fiber Network in Wisconsin

Nokia (NOK) has secured a contract with the City of Superior, Wisconsin, to deploy its advanced fiber and IP solutions for the ConnectSuperior initiative, aiming to deliver ultra-broadband to approximately 26,000 residents via a new city-owned, wholesale open-access network. This win, alongside recent network modernization contracts in India and Malaysia, underscores Nokia's expanding footprint in global digital infrastructure. While the company projects strong sales growth in its Network Infrastructure, Cloud, and Network Services segment for 2025, Nokia remains exposed to the highly cyclical telecommunications industry, intense competition, and macroeconomic headwinds, contributing to its current Zacks Rank #4 (Sell) and a 6.8% stock gain over the past year, significantly underperforming the Wireless Equipment industry's 32.4% growth.

Analysis

Nokia (NOK) has secured a contract to provide its fiber and IP solutions for the City of Superior's new wholesale open-access network, targeting 26,000 residents. This project, utilizing Nokia's Altiplano Open Access platform and 7750 Service Routers, adds to a series of recent global wins, including network upgrades in India with Vortex Group and an AI data center contract in Malaysia with Extreme Broadband. These deals highlight momentum in Nokia's Network Infrastructure business. However, this operational progress is contrasted by a cautious outlook. For 2025, the company projects strong growth in its Network Infrastructure, Cloud, and Network Services segments but anticipates flat net sales in its core Mobile Networks division. This mixed guidance is compounded by significant risks, including the cyclicality of the telecommunications industry and intense market competition. The market's skepticism is reflected in the stock's performance, which has gained only 6.8% over the past year, drastically underperforming the 32.4% growth of the wider Wireless Equipment industry and contributing to its Zacks Rank #4 (Sell) rating.

Key Decisions for Investors

• Investors should weigh the positive momentum from recent infrastructure contract wins against the projected stagnation in the Mobile Networks segment and significant industry-wide headwinds.
• Given the stock's substantial underperformance relative to its industry (6.8% vs 32.4% gain) and its 'Sell' rating, it may be prudent to re-evaluate holdings in NOK against better-performing peers in the sector.
• Monitor future earnings reports for any revision to the 2025 guidance, as any sign of a turnaround in the Mobile Networks segment could be a key catalyst, while continued weakness would validate the current cautious stance.