Nokia's stock surged 6.3% in Helsinki on Monday, reaching its highest level in 17 years, as the company's pivot toward AI data center infrastructure and a divestiture of a minor business segment attracted new buyers. The move marks a significant shift in investor perception, with Nokia increasingly viewed as an AI data center supplier rather than just a traditional telecom equipment maker.
AI Data Center Orders Surge
First-quarter orders from AI and cloud customers hit 1 billion euros, up 49% year-over-year, now accounting for 8% of Nokia's total sales. The company's optical networking business, which provides high-capacity links crucial for data movement across chips and servers, saw revenue climb 20%. Overall Network Infrastructure revenue rose 6% in the quarter, while comparable net sales ticked up 4% on a constant-currency, portfolio-adjusted basis.
CEO Justin Hotard noted that demand has "accelerated significantly" since November, leading Nokia to revise its AI and cloud addressable market growth forecast to a 27% compound annual rate from 2025 to 2028, up from a prior estimate of 16%. The company also raised its 2026 Network Infrastructure sales growth target to 12%-14%, compared to the earlier 6%-8% range.
Fixed Wireless Access Sale to Inseego
On April 30, Nokia and Inseego announced that Inseego will acquire Nokia's fixed wireless access customer-premises equipment division, which provides devices for mobile broadband connections. As part of the deal, Nokia expects to receive roughly a 7% stake in Inseego at closing, followed by an additional $10 million investment, bringing its ownership to about 11%. The transaction is expected to close in the fourth quarter, though Nokia emphasized it is not financially material for the company.
Konstanty Owczarek, Nokia's chief corporate development officer, described the move as part of Nokia's effort to "simplify its operational model" while sharpening its focus on AI-driven network infrastructure. Inseego CEO Juho Sarvikas called the acquisition a "transformative step" for the U.S. wireless broadband player.
Analyst Views and Valuation Concerns
Morningstar analyst Martin Szumski raised his fair value estimate for Nokia to 7.30 euros from 6.50 euros on Monday, while leaving Ericsson's unchanged at 105 Swedish crowns. Szumski noted that both companies continue to compete in the tight-margin mobile network equipment market, but argued that Nokia has an edge in tapping AI demand thanks to its optical networking arm, which Ericsson's focus on cloud software and enterprise cannot match.
Morningstar flagged Nokia as overvalued, citing the AI frenzy, but still gave the edge to Nokia's AI-driven optical business over Ericsson's. The firm projects Nokia with 4% average annual revenue growth over the coming decade, compared to just 1% for Ericsson, factoring in non-mobile units. Mobile network capital expenditure remains sluggish, and Morningstar expects little change until 6G rollout, likely closer to 2030.
Investor Sentiment and Nvidia Partnership
U.S. investor chatter has intensified. On April 28, CNBC's Jim Cramer called Nokia "a winner" and declared it "back," following stronger-than-expected, AI-driven earnings. The company's AI push gained momentum in October 2025, when Nvidia invested $1 billion for a 2.9% stake in Nokia, tied to a partnership on AI and data center gear. Hotard told Reuters that products from the collaboration could begin generating revenue as early as 2027.
Nokia's U.S.-listed ADRs last changed hands at $13.39 by 1546 GMT, topping the previous session's close. The stock's run underscores a broader shift in investor sentiment, but risks remain: shares have outpaced actual evidence, and the Inseego deal is not yet finalized. The key question is whether hyperscaler demand and optical orders can sustain the momentum.
