Shares of Nokia (NYSE:NOK) jumped 7.2% on Monday following bullish analyst commentary.
DNB Markets analyst Frank Maao lifted his rating on Nokia's stock from sell to buy and boosted his share price forecast from $4.83 to $5.79. His new estimate represents potential gains for investors of roughly 20%.
Maao says rival telecom equipment maker Ericsson's solid fourth-quarter results bode well for Nokia and its 5G-focused growth initiatives.
Due in part to its low share price, Nokia has become a favorite stock among traders on the increasingly popular Reddit group, r/WallStreetBets. That's led to a surge in Nokia's trading volumes in recent days, which has helped to boost its share price.
But unlike GameStop, AMC Entertainment, and many of the other stocks targeted by WallStreetBets' traders, Nokia is not a heavily shorted stock. The 5G equipment maker also has much more promising growth prospects due to the expected rapid rollout of 5G wireless technology around the world.
Investors will get a chance to check in on Nokia's 5G-related progress when it reports its fourth-quarter financial figures, which are expected to be released on Feb. 4.