Nokia's AI Sleeper.
Nokia Oyj Emerges as a Key Investment Opportunity in the Booming AI Market.
Anonymous
Nokia Oyj (NOK) has surged more than 150% year-to-date in 2026, trading near a 17-year high of around $16.85 per share as of early June, according to Insider Monkey. The Finnish telecom equipment maker has reinvented itself as a core provider of AI networking infrastructure — and Wall Street is paying attention.
The rally was fueled by a $1 billion investment from NVIDIA, a $2.3 billion acquisition of optical networking firm Infinera, and a new CEO hired straight from Intel's AI and data center division. Nokia is no longer a phone company. It is now a picks-and-shovels play on the global AI buildout.
NVIDIA's $1 Billion Bet Reshapes Nokia's Identity
In October 2025, NVIDIA made a strategic $1 billion investment in Nokia to co-develop AI-RAN — a technology that turns radio access networks into software-driven, AI-powered platforms. NVIDIA paid $6.01 per share. The stock now trades above $16. That gap tells the story of how fast sentiment has shifted, according to NVIDIA Investor Relations.
NVIDIA CEO Jensen Huang framed the deal in stark terms. "Telecommunications is the digital nervous system of our economy," Huang said, adding that the two companies are "igniting this revolution" together, as reported by PYMNTS. Analysts at Morgan Stanley responded by raising Nokia's price target to €14 with an Overweight rating, citing its evolution into an "AI-driven network infrastructure platform," according to StocksToTrade.
Infinera Deal Adds Optical Muscle to Nokia's AI Push
Nokia closed its $2.3 billion acquisition of Infinera on February 28, 2025. Infinera is a San Jose-based maker of optical networking gear — the fiber and light-based systems that move massive amounts of data across long distances. The deal is projected to boost Nokia's optical revenue by 75%, according to research firm Analysys Mason.
The timing matters. AI data centers require what experts call "lossless, deterministic networking" — networks that move data fast without errors or delays. Traditional cloud setups cannot reliably do this. Nokia's optical systems are designed for exactly this problem, according to Daily FT. The Infinera integration gives Nokia a stronger claim to that market.
New CEO Justin Hotard Signals a Clean Break From Telecom's Past
Nokia brought in Justin Hotard as President and CEO on April 1, 2025. He came from Intel, where he ran the Data Center and AI Group. His appointment was a clear signal, according to Reuters: Nokia was done being a legacy telecom vendor. Nokia Chair Sari Baldauf said Hotard's expertise in AI and data centers is "critical for Nokia's future growth," as reported by Data Centre Magazine.
Hotard has leaned into the pivot publicly. "AI is the new workload reshaping networks," he said at MWC 2026. Nokia also reported that AI and Cloud customer sales grew 49% year-over-year in Q1 2026, now making up 8% of total group sales, per Nokia's own interim report cited by Insider Monkey. The company targets between €2.0 and €2.5 billion in operating profit for the full year 2026.
Bulls See a Hidden Gem, But Bears Warn of Overhype
Not everyone is convinced. At prices above $16, some analysts say the stock is overvalued by roughly 17.6% relative to fair value, according to Simply Wall St. They argue the 140%-plus rally has already "priced in" most of the upside from the NVIDIA deal. The stock's price-to-earnings ratio has climbed to around 100x — a level more common for high-growth software firms than telecom equipment makers.
The long-term bull case rests on a big macro bet. Elon Musk has predicted that AI could generate a $250 trillion economy by 2040, creating demand for the kind of connectivity infrastructure Nokia builds, as noted by Forbes. If even a fraction of that plays out, Nokia's optical and AI-RAN systems could be repriced from "utility" to "growth stock." But that is still a big if — and the stock has already moved a long way on the promise alone.
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