Nokia Oyj shares closed Monday at 11.39 euros in Helsinki, up 4.1%, extending a rebound after last week's volatile swings. The stock had fallen 7.1% on Thursday before recovering 3.8% on Friday and adding further gains Monday, according to MarketScreener data.
The Finnish network equipment maker's first-quarter results showed a 49% increase in sales to AI and cloud customers, with those segments now representing 8% of total group revenue. Orders from these clients reached 1 billion euros, helping offset weakness in the traditional mobile networks business.
CEO Justin Hotard said Nokia is tracking somewhat above the midpoint of its full-year comparable operating profit forecast of 2.0 billion to 2.5 billion euros. The company maintained its guidance, providing a steady anchor amid recent share price swings.
Investors are increasingly viewing Nokia as more than a 5G gear maker. The company's optical and IP networks, which form the backbone for data transfer between AI data centers, have become a key growth driver. The acquisition of U.S.-based Infinera has positioned Nokia among the top global suppliers of optical transport systems.
Argus analyst Jim Kelleher rated Nokia's U.S. shares a Buy with a $15 target, citing AI-driven momentum in Network Infrastructure and the Infinera deal as factors that reduce Nokia's reliance on its mobile networks business. However, Morningstar analyst Martin Szumski cautioned that shares appear overvalued, noting that AI and cloud sales still make up only a small portion of revenue. He pointed out that Nokia's optical portfolio gives it an edge over Ericsson in capturing AI demand, but valuations are stretched.
Ericsson, Nokia's main Western competitor, reported disappointing first-quarter profit in April, citing rising chip costs due to AI demand. Morningstar sees little near-term pickup in mobile networking, warning demand could remain stagnant as 5G buildouts slow.
Nokia has also been streamlining. In late April, it agreed to sell its fixed wireless access business to Inseego, though the deal is not financially material. Nokia will retain a commercial tie and equity warrants, with closing expected in the fourth quarter of 2026.
Hotard highlighted a gap in Europe's AI infrastructure, stressing that connectivity and data center capacity are as critical as manufacturing. Yet regulatory hurdles, power constraints, and construction delays could slow the market Nokia targets.
The next major test for Nokia comes on July 23, when second-quarter and half-year results are released. For now, the stock's movement hinges on whether AI-driven data demand can translate into sustainable network sales, rather than memories of past phone successes or the earlier 5G cycle.
