Nokia's stock surges 73% in 2026 amid AI and data center initiatives

Article by Xiao Bing, Shenchao TechFlow

In 2014, Microsoft spent $7.2 billion to acquire Nokia's mobile phone business.

That year, everyone believed the story of this Finnish company, which had been around since 1865, had come to an end. The Nokia 3310—memorized by a generation for its ability to crack walnuts, survive being thrown against walls, and run Snake—along with the entire company behind it, was placed in the album of "nostalgic relics."

Eleven years later, Jensen Huang called and said he wanted to give them $1 billion.

Nokia's stock has risen approximately 73% since the beginning of this year and 130% compared to the same period last year.

This is not a "dead cat bounce" of a legacy stock; it's an underappreciated undercurrent within the entire AI narrative from 2025 to 2026.

Moreover, almost no Chinese investors are seriously discussing it.

The story begins with a name.

In February 2025, Nokia’s board announced that current CEO Pekka Lundmark would step down, with American Justin Hotard taking over on April 1.

This is the first American-born CEO in Nokia's history since its founding in 1865.

Hotard is the kind of figure in the tech world who isn’t widely known but consistently lands at the forefront of every major trend. He earned his undergraduate degree in Electrical Engineering from the University of Illinois and an MBA from MIT Sloan. After spending eight and a half years at Hewlett Packard Enterprise (HPE), he rose to lead the High-Performance Computing and AI Lab, personally delivering the U.S. Department of Energy’s first exascale supercomputer. In early 2024, he was recruited by Intel to head its Data Center and AI Group, reporting directly to Pat Gelsinger.

Pay attention to his background. HPC, data centers, and AI—these three keywords have nothing to do with Nokia’s image over the past decade.

Nokia makes base stations, telecom equipment, and fiber optics, selling them to carriers—a typical, slow-moving, market-forgotten "old Europe" hardware company.

But in early 2025, Nokia’s board made a decision that seemed counterintuitive: they chose someone with expertise in AI, not telecommunications.

In the appointment announcement, Board Chair Sari Baldauf said, "The AI and data center markets are key areas for Nokia's future growth."

At that moment, almost no one took it seriously. The market responded indifferently, with only a slight rise in stock price. All analysts were writing cautious analyses such as, “Finland’s old factory appoints a new leader—can the newcomer reverse the decline?”

No one realized that the company was quietly changing its engine.

If you look only at Hotard’s appointment, it’s just a routine executive rotation. But when you consider it alongside another event from six months ago, the script changes completely.

In June 2024, Nokia announced the acquisition of U.S.-based company Infinera for $2.3 billion.

Infinera is a company that specializes in optical networking—the fiber-optic communication equipment used to connect data centers to each other and racks within data centers.

If you’ve spoken with people working on AI infrastructure, you’ll know this fact:

The biggest bottleneck in AI data centers is not GPUs, but optical communication.

NVIDIA packs 72 GPUs into a single rack, and these GPUs must exchange vast amounts of data among themselves. A single data center may contain tens of thousands of GPUs, all of which also need to exchange data. Additionally, training data must be synchronized between two data centers. With each additional cluster, the demand for optical modules grows exponentially.

That’s why, over the past two years, the stock prices of optical module companies—such as Coherent in the U.S. and China’s InnoLight and Eoptolink—have skyrocketed.

Infinera is one of the few companies that possess both photonic integrated circuit (PIC) technology and data center interconnect capabilities. It already has established customer relationships with major hyperscale cloud providers in North America, including Microsoft, Amazon, and Google.

When Nokia signed this deal in June 2024, the market interpreted it as: "A traditional telecommunications company acquiring another traditional fiber-optics company"—a classic "two elephants huddling together for warmth" narrative.

But after the transaction closed in February 2025 and Infinera was consolidated into Nokia, the financial figures of this Finnish veteran began to change:

• For the full year of 2025, revenue from the optical network business increased by 17% year-over-year.
• In the first quarter of 2026, optical network sales reached €821 million, a 20% year-over-year increase, surpassing IP and core software to become Nokia's second-largest business.
• Sales contributed by AI and cloud customers surged 49% year-over-year in a single quarter.

Most importantly, AI and cloud customers placed €1 billion in orders with Nokia in the first quarter of 2026.

What does this number mean? It’s equivalent to a quarter’s order volume exceeding Infinera’s entire annual sales before its acquisition.

Yet, outside Western tech media, there is almost no voice on this.

What truly sent the market into a frenzy was October 28, 2025.

On that day, NVIDIA announced at its GTC conference in Washington that it would invest $1 billion in Nokia at a price of $6.01 per share.

Note this detail: "$6.01 per share" is a subscription price, not the market price. NVIDIA is not purchasing shares on the secondary market; instead, Nokia has issued a new batch of shares specifically for NVIDIA, making NVIDIA a strategic investor rather than merely a financial investor.

Why is Jensen Huang giving Nokia $1 billion?

NVIDIA's official statement is: Both parties will jointly develop AI-RAN (AI-empowered Radio Access Network). Nokia’s 5G and 6G software will be ported to NVIDIA’s CUDA platform; NVIDIA’s Arc-Pro accelerator, specifically designed for the telecommunications industry, will be integrated into Nokia’s base stations.

T-Mobile USA is the first pilot operator. Dell provides the servers.

It sounds like just another common story of "AI empowering [industry]." But the real surprise lies in a technical detail that 99% of people won’t notice.

First, you need to understand the context: In the AI-RAN space, Nokia is not the only player. Its biggest competitor is Ericsson, another Nordic company.

Ericsson and Nokia appear to do the same thing—providing 5G/6G base station equipment to telecom operators—but they took completely opposite approaches to the question of how to integrate GPUs into base stations.

Engineers jokingly refer to these two paths as "religious wars."

The first approach is called Lookaside acceleration. This is the path being taken by Ericsson and Intel. Simply put: the CPU in the base station remains the main controller, while the GPU acts only as a "helper sitting beside it." When an acceleration task is needed, the CPU "hands off" the task to the GPU, and the GPU returns the result after completing it. Data must constantly shuttle back and forth between the CPU and GPU.

The second path is called Inline (online acceleration). This is the approach taken by Nokia and NVIDIA. Simply put: network data received by the base station is first sent to the GPU, which processes it before passing it to the CPU. The GPU becomes the main player, while the CPU takes on a supporting role.

Does it just sound like an engineering sequence issue?

No, this is a fundamental disagreement over who will be the computing center of the future.

The entire purpose of NVIDIA's existence is to prove that GPUs should be at the center of data processing, with CPUs taking a back seat. The entire CUDA ecosystem is designed with a philosophy centered on the GPU. The lookaside approach, by its very architecture, assumes that the CPU remains the dominant force—this fundamentally contradicts NVIDIA’s core worldview.

So when NVIDIA was looking for a telecommunications partner, it couldn’t choose Ericsson. It had to choose a partner willing to put GPUs at the center stage.

Nokia is that partner.

That’s why this $1 billion is not simply a “strategic investment”—Jensen Huang has personally stamped his mark on a new frontier of the AI narrative, buying entry to a network that will bring NVIDIA’s GPUs into five million base stations worldwide.

According to market research firm Omdia, the cumulative market size of AI-RAN is projected to exceed $200 billion by 2030.

If told correctly, this story could make Huang Renxun’s $1 billion one of the highest-return investments of his life.

Nokia's comeback also has a sensitive underlying thread.

On April 13, 2026, Bank of America analyst Oliver Wong upgraded Nokia from "Neutral" to "Buy," raising the target price from €6.87 to €10.70. On the same day, Nokia's stock surged 9.67% in a single day, with trading volume increasing by 178% compared to the 3-month average.

In that report, Oliver Wong listed four reasons why Nokia was undervalued. The third reason, while phrased subtly, was very clear in its meaning:

After European countries gradually restricted Huawei and ZTE, Nokia has effectively become "the last remaining Western sovereign-level supplier."

In simple terms: Europe is building its own sovereign data centers and sovereign 5G/6G networks, and Chinese equipment is not allowed. Since no such companies exist in the U.S., the only remaining Western suppliers are Nokia and Ericsson. But Ericsson lacks full-stack optical networking capabilities, Infinera has been acquired by Nokia, and Cisco is an American company—so almost all of Europe’s sovereign cloud spending will go to Nokia.

This is a classic case of geopolitical arbitrage: changes in the international order have handed Nokia a significant opportunity—so long as it remains on the field, it can reap these benefits.

Add to this the massive demand for optical networks from U.S. hyperscale cloud providers and T-Mobile’s bet on AI-RAN, and three streams of capital are simultaneously flowing toward Nokia from three different directions.

Put all the clues together, and you'll find a very dramatic timeline:

• In June 2024, Nokia announced the acquisition of Infinera.
• In February 2025, Hotard was appointed as the new CEO.
• In October 2025, NVIDIA invested $1 billion.
• On April 13, 2026, Bank of America upgraded, with the stock rising +9.67% in a single day.
• On April 22, 2026, Q1 earnings revealed €1 billion in AI/cloud orders, with optical networking business up 20%.
• On April 27, 2026, CFRA doubled its price target from $8 to $16, sending Nokia's stock to its highest level since 2015.

Did you notice?

The fundamentals began shifting 18 months ago. But it took the market 18 months to connect the dots.

This is the classic "value discovery" process. When a story hasn't been clearly told yet, everyone dismisses it as "old wine in old bottles"; once the story is clearly explained, much of the valuation gap has already been closed.

Nokia’s current forward P/E ratio of 26 is not expensive for a light network business growing at 17%. However, it is no longer the forgotten stock lying at its low point from earlier this year.

Over the past two years, Chinese investors have had their eyes firmly on NVIDIA, TSMC, Broadcom, and AMD—the engines driving this AI wave.

But beyond the engine, there are also the transmission, driveshaft, tires, and highways.

The AI narrative is spreading from "chips" to "pipelines."

The story of optical module manufacturers has been told for over a year; the next to be revalued by the market may be base stations, fiber optics, data center power, or cooling systems.

History doesn't repeat itself, but it often rhymes.

When a new technological paradigm truly arrives, the greatest alpha may not be in the most obvious places.

It’s in those corners you thought had been forgotten.