Nokia's stock reached a new 52-week high on Wednesday, driven by surging demand from AI and cloud clients. The Finnish network equipment maker's shares traded at 13.85 euros in Helsinki after touching 14.22 euros earlier in the session, according to Google Finance data. While early gains faded slightly, buying interest remained strong.
In New York, Nokia's American depositary receipts closed at $16.46 on Tuesday, up 6.4% and marking a third consecutive session of gains. Trading volume was approximately double the 50-day average, indicating heightened investor interest, as reported by MarketWatch.
The stock's performance reflects a shift in market perception, with Nokia now viewed more as an AI data-center infrastructure supplier than a traditional telecom equipment provider. The broader market also provided support, with the STOXX 600 rising 0.47% and the Nasdaq Composite gaining 1.19%, according to Reuters.
Nokia's Q1 earnings, reported in April, remain a key catalyst. Comparable operating profit jumped 54% to 281 million euros, surpassing analysts' average forecast of 250 million euros. Sales to AI and cloud clients surged 49%, now accounting for 8% of total revenue. Optical Networks revenue climbed 20%, and the company booked 1 billion euros in orders from AI and cloud customers.
CEO Justin Hotard expressed optimism about the company's growth trajectory, stating that Nokia is "increasing our growth assumption" for Optical and IP Networks, with plans to increase spending to meet rising demand from AI and cloud customers. He noted that Nokia is "tracking somewhat above the mid-point" of its full-year comparable operating profit target of 2.0 billion to 2.5 billion euros.
Nokia recently launched its AI Networking Innovation Lab in Sunnyvale, California, in partnership with AMD, Keysight, Lenovo, Nscale, Supermicro, VIAVI, and Weka. The lab will test AI data center networks under real-world conditions, aiming to reduce deployment risk, according to Nokia's Rudy Hoebeke.
The competitive landscape is evolving as AI reshapes the market. While Nokia is still grouped with Ericsson for mobile networks, it is now increasingly compared to optical and data center firms like Ciena and Arista. Ericsson recently missed first-quarter core profit forecasts, weighed down by rising AI chip costs and lower North America sales.
Despite the rally, Nokia's stock has surpassed nearly all analyst price targets. The 12-month average target on Investing.com stands at 9.375 euros, with a high of 14 euros and a low of 4.65 euros. Wednesday's intraday high exceeded these levels, leaving limited upside if the AI pipeline slows or legacy telecom margins disappoint.
Infrastructure challenges could also pose headwinds. Hotard noted that Europe lacks sufficient setup for AI data centers, requiring both stronger connectivity and more data-center space. If power, permits, or cloud budgets become constraints, the optical-network rally could cool faster than current prices suggest.
Nokia's next quarterly and half-year results are due on July 23. Until then, shares may trade on speculation about AI-cloud demand, analyst price target changes, and whether the latest 52-week high holds or gives way on volume.
