Intel raises capex outlook to $20 billion; Nokia AI orders surge to 2.8 billion euros

Nokia AI order intake reaches 2.8 billion euros in Q2

Intel’s revised spending plan emerged after the company reported second-quarter earnings that Davidson analysts characterized as strong, highlighted by significant beats on both top and bottom lines. The chipmaker’s capital expenditure forecast for the year now stands at more than $20 billion, around $5 billion higher than the guidance provided last quarter, the Davidson analysts wrote in a research note.

Morgan Stanley estimated that Intel’s fiscal 2027 capital expenditures could reach approximately $30 billion. “We would expect investor enthusiasm for this spending to be entirely dependent upon enthusiasm for the longer-term prospects from those investments,” the Morgan Stanley analysts said.

Jefferies analyst Blayne Curtis wrote that the planned spending increase suggests Intel is increasingly confident in long-term demand. The chipmaker raised its 2026 capital expenditure forecast to $20 billion from $18 billion, and projected a significant uplift in that figure next year, according to Curtis. The increased spend signals that Intel’s efforts to work with external chip designers are gaining traction, with customers moving from testing Intel’s advanced 14A chip-making process toward committing to binding agreements, he said.

Intel shares rose 4.5% in premarket trading.

Davidson analysts noted that “demand continues to exceed supply in all areas of the business (besides PCs) with strong momentum in the company’s CPU offerings expected to continue into next year.” They viewed the aggressive capital expenditure raise “as a proof point that Intel is likely to see continued customer acquisition as the United States demands more domestic semiconductor manufacturing.”

Nokia’s AI order book surges. Nokia shares are up about 65% year-to-date driven by AI-related optimism, according to UBS analyst Francois-Xavier Bouvignies. The company’s second-quarter AI and cloud revenue more than doubled on year, while order intake reached 2.8 billion euros — equivalent to the prior three quarters combined, Bouvignies wrote.

UBS expects the strong demand to persist, supporting optical network and IP network revenue growth of about 20% in 2027 versus high-teens growth in 2026. “However, margin expansion is likely to be constrained by the investments required to support scaling,” Bouvignies wrote. UBS lowered its price target on Nokia to 9.65 euros from 11 euros and reiterated its neutral rating. Shares fell 1.5% to 8.57 euros.

Bank of America Securities took a more bullish view, with analysts writing that Nokia’s AI-related revenue could double in 2027, accounting for over 20% of total revenue mix, which they said would accelerate earnings growth and bring valuation closer to AI-focused networking peers. “Nokia’s AI order run rate has now effectively doubled from about 1 billion euros/quarter to about 2 billion euros/quarter,” BofA wrote. The bank raised its price objective to 16 euros from 15.60 euros and reiterated its buy rating. Shares fell 2.2% to 8.51 euros.

SAP cloud backlog beats estimates. SAP’s strong current cloud backlog in the second quarter is evidence that top-line growth will accelerate next year, Deutsche Bank analyst Johannes Schaller wrote. The German business-software group reported that its current cloud backlog — a closely watched measure of sales expected over the coming year based on existing contracts — grew 26% at constant currencies in the first half, above expectations of around 24%.

Schaller said that even adjusting for M&A, CCB growth improved slightly from the first quarter and now stands above both cloud revenue growth and the midpoint of 2026 cloud revenue guidance. SAP shares traded 6.6% higher at 136.74 euros.

Citi analyst Balajee Tirupati noted that SAP’s decision to reiterate annual revenue guidance showed prudence, adding that growth below the midpoint of guidance is “less likely” given CCB strength. SAP continues to expect cloud revenue between 25.8 billion and 26.2 billion euros this year, up 23% to 25% at constant currencies.

J.P. Morgan analysts described SAP’s miss on earnings before interest and taxes and on-year margin compression as “unpleasant surprises,” noting that “full-year EBIT guidance does require second-half EBIT growth to re-accelerate from the second-quarter level.”

Other sector moves. CIMB Securities turned more positive on Malaysia’s mobile telecom operators, with analyst Choong Chen Foong saying industry mobile revenue could grow 2% to 3% annually in 2026-2027, the strongest pace since 2013, as pricing competition eases. CIMB pegged Telekom Malaysia as its top pick, citing potential share buybacks and special dividends.

Intel’s planned capacity expansion should benefit chip tester AEM’s earnings, DBS analyst Amanda Tan said. Although front-end manufacturing will account for the bulk of investment due to higher wafer fab costs, Intel also expects to expand backend capacity, which flows through to AEM, which counts Intel as a major customer, the analyst said. AEM’s shares were last down 0.9% at S$8.79.

Chinese social-media company Newborn Town could face short-term headwinds, Citi analysts said, after the company’s first-half revenue guidance triggered a 6% drop in its share price. “Additional concerns over visibility for short-drama monetization and AI investment target may drive near-term stock-price volatility,” Citi said. Shares fell an additional 5.8% to HK$8.18.