Nokia's stock edged higher in Helsinki on Monday, hovering near its 52-week peak, as the broader market for networking hardware got a lift from Cisco's strong artificial intelligence-related results. Shares of the Finnish telecom equipment maker rose 1.2% to €12.05, just shy of the €12.30 high reached last week.
Cisco's AI Orders Fuel Rally
The catalyst came from Cisco Systems, which reported $5.3 billion in AI infrastructure orders from hyperscalers so far this fiscal year and raised its full-year revenue outlook to between $62.8 billion and $63.0 billion. Cisco's third-quarter networking revenue surged 25% to $8.82 billion, underscoring that AI demand is now driving spending on switches, routers, and optical gear — not just chips. This read-through trade has lifted Nokia's U.S.-listed ADRs by over 10% since Cisco's results, with the ADR up roughly 116% year-to-date through May 15.
Nokia's Own AI Momentum
Nokia had already set the stage for its rally with its April earnings report. First-quarter net sales to AI and cloud customers jumped 49%, and the company booked €1 billion in orders from that segment. CEO Justin Hotard said Nokia is "investing to capture accelerating demand," and the company raised its 2026 Network Infrastructure growth target to between 12% and 14%. The optical networks business grew 20% in Q1, reflecting the surge in cloud and AI-related buying.
Beyond the Data Center
Nokia is also pushing AI into new areas. Last week, the company introduced agentic AI tools for home and broadband networks, which it says can handle operational tasks proactively. Sandy Motley, president of Nokia's fixed networks unit, said the software can "solve problems before the customer is even aware." The tools leverage Nokia's experience deploying over 600 million broadband lines. Meanwhile, Nokia's partnership with Nvidia — which invested $1 billion in October to accelerate AI-RAN technology — remains a key part of the story. Nokia is also expanding into defense communications through its work with Anduril and a modular 5G system developed with Lockheed Martin for U.S. and allied forces.
Valuation and Risks
The rally has pushed Nokia's valuation to elevated levels. The stock trades at 33.72 times trailing earnings and 27.59 times cash flow, both above sector medians. Nokia's risk disclosures highlight heavy competition, supply-chain issues, rising component costs, and potential changes in customer spending. The company maintains its full-year comparable operating profit guidance of €2.0 billion to €2.5 billion.
What's Next
Investors will get their next update on July 23, when Nokia reports second-quarter and first-half results. The key question is whether the strong AI and cloud orders will translate into actual shipments, margin expansion, and cash flow. With Cisco driving near-term sentiment and Nokia's own AI narrative gaining traction, the margin for error is narrowing. The real test starts now.
