Nokia has passed the low point and trends are getting better - but it takes time In a glass half full world Nokia is seeing trends inflect. In a glass half empty world it''s still shrinking and the pace is materialising slower than expected, as reflected in a guidance cut for FY24 that still implies an improvement. While Ericsson might have a better near term earnings set-up we continue to favour Nokia on a relative basis given more optionality and cheaper valuation. What did we learn that we did not know pre-Q3 24? 1) Revenue trends remain difficult with a 9% miss vs consensus. In NI optical in particular and ex-US revenues are the main incremental source of disappointment. More broadly Nokia is getting orders in the door but these are taking longer to convert to sales. 2) There appears to be a broader recovery happening in US operator capex, as was also visible in Ericsson''s commentary y''day. Nokia said all NI sub-segments grew 10% in Norther America. 3) Margins were robust but there was some benefit from an unspecified account receivable in ''other operating income'' (in turn nearly EUR100m in the quarter). Stripping this out operating profit would have missed consensus/BNPPE instead of landing in-line. 4) Growing momentum in non-telco CPS. Nokia''s missed the AI hype so far but there are budding signs it might get on the bandwagon. It signed an interesting deal with Coreweave (unlisted) and the Infinera deal should strengthen this further. Has our investment view changed? No We have long been cautious on the mobile RAN market (see Boulevard of Broken Dreams earlier this year) and Nokia faces additional market share pressure (ATandT) on top. However, there is strategic optionality in the asset. NI is turning and CNS might find an AI angle. Nokia could be a surprise winner if there is a Republican victory in November (bonus depreciation). Changes to estimates We make 1-2% cuts to 24-26 operating profit but leave our EUR3.6 TP unchanged.