Nokia Oyj (HEL:NOKIA) saw its shares climb sharply on Thursday, gaining 9.64% to close at €11.20 in Helsinki trading. The rally added approximately €5.6 billion to the company's market capitalization in a single session, reflecting strong investor enthusiasm for the Finnish telecom equipment maker's pivot toward artificial intelligence and secure networking solutions.
According to Google Finance, Nokia's market value reached €64.16 billion by late afternoon, with shares trading between €10.50 and €11.24 during the day. The move outpaced the broader market, as the OMX Helsinki 25 index added 1.84% to 6,166.96 points. The surge also resonated across the sector, with Telefonaktiebolaget LM Ericsson (STO:ERIC-B) climbing 6.70% in Stockholm and Ciena Corp (NYSE:CIEN) rising 6.09% in New York.
Investors were reacting to news of a collaboration between Nokia Defense and NestAI, focusing on AI-backed command-and-control systems, mission planning, and early threat detection using deployable 5G and sensing technologies. While the announcement did not include a specific contract value, the market interpreted it as a strategic validation of Nokia's AI connectivity pitch beyond traditional telecom infrastructure. Mikko Hautala, Nokia's top geopolitical and government relations executive and chairman of Nokia Defense, emphasized that "AI only works in the field when it has secure, resilient connectivity behind it." NestAI founder and executive chairman Peter Sarlin noted the effort targets "real conditions European forces face."
Thursday's trading session was standard for Helsinki, with no holiday effects. Nokia is scheduled to report its second-quarter and half-year results on July 23, adding to the anticipation. The company's price-to-earnings ratio stood at 79.50, reflecting the premium investors are willing to pay for current earnings amid AI optimism.
After the market close, Nokia transferred 43,552,813 treasury shares to participants in its equity incentive plans, reducing its treasury holdings to 88,583,624 shares. With 5.74 billion shares outstanding, the transfer represents about 0.76% of total shares, a relatively minor figure compared to the day's market cap gain.
Nokia's first-quarter results showed AI and cloud sales jumping 49% year-over-year, accounting for 8% of total revenue, with orders from AI and cloud customers reaching €1 billion. Optical Networks revenue grew 20%, and CEO Justin Hotard noted that demand had "accelerated significantly." The company raised its 2026 growth target for Network Infrastructure to 12%-14%, and for Optical and IP Networks combined to 18%-20%.
Reuters reported that comparable operating profit rose 54% to €281 million, beating analyst expectations, driven by higher demand from hyperscalers building data centers. The acquisition of Infinera has further boosted Nokia's sales in optical networking.
The Wall Street Journal reported this week that Nvidia Corp (NASDAQ:NVDA) quietly acquired a 2.9% stake in Nokia for $1 billion, reinforcing the perception of Nokia as an AI infrastructure play. However, over half of Nokia's revenue still comes from traditional mobile infrastructure, highlighting the risks. With shares trading at nearly 80 times earnings, any slowdown in AI-driven growth or supply chain issues could pressure the stock ahead of the July 23 earnings report.
