AI-RAN and a Silicon Valley Lab: The Twin Engines Behind Nokia's Resurgent Stock

A new strategic partnership with Nvidia and a freshly opened AI lab in California have propelled Nokia shares to a 52-week high of €13.45, more than doubling their value since the start of the year. The rally, which saw the stock gain over 10% on Friday alone, reflects a fundamental repricing of the Finnish telecom equipment maker as an infrastructure play in the artificial intelligence boom.

The timing could not be better. Nvidia, the chip giant that has become the bellwether for AI spending, is reorganising its reporting around Data Center and Edge Computing platforms. AI-RAN base stations – the kind Nokia builds with its anyRAN software – now fall squarely under the Edge umbrella. At its latest quarterly update, Nvidia flagged its collaboration with T?Mobile and Nokia as a key reference point, even though no specific new order was announced. That strategic nod, combined with a T?Mobile pilot launched in the spring, has shifted the narrative away from Nokia’s legacy as a telco supplier and toward its role in distributed AI compute.

The numbers behind the shift are beginning to materialise. In the first quarter of 2026, Nokia’s revenue from AI and cloud customers jumped 49% year on year, accounting for 8% of total group sales. Group revenue rose 4% to €4.5 billion, while comparable earnings per share edged up from €0.03 to €0.05. More tellingly, the mix is improving: high?margin optical networks, a key component of AI infrastructure, grew 20%, lifting the entire Network Infrastructure division by 6%.

Should investors sell immediately? Or is it worth buying Nokia?

On May 21, Nokia opened its AI Network Innovation Lab in California, a tangible signal that the strategy is operational. Management now forecasts the addressable market for AI and cloud infrastructure will grow at a compound annual rate of 27% through 2028 – a sharp upward revision from the 16% estimate given at last November’s Capital Markets Day. For the full year 2026, Nokia targets a comparable operating profit of €2.0 billion to €2.5 billion, with capital expenditure of €900 million to €1 billion.

The analyst community has responded in kind. CFRA upgraded the stock to Buy and more than doubled its price target to $16, arguing Nokia should be valued as an optical networking and AI infrastructure company rather than a legacy telecom equipment vendor. Argus followed with a Buy and a $15 target. In Europe, JPMorgan lifted its target from €6.90 to €12 (Overweight), Morgan Stanley raised its to €11, and Deutsche Bank switched to Buy with an €8.50 target.

Meanwhile, Nokia is streamlining its portfolio. The fixed wireless access terminal business (FWA CPE) is being sold to Inseego in exchange for an 11% equity stake plus warrants and a cash component, a deal expected to close in the fourth quarter. Though immaterial to the group’s finances, it fits a pattern of shedding non?core assets that began in November. On the leadership front, Emma Falck, a former Siemens executive, will take over a newly created Mobile Infrastructure division in September, replacing Tommi Uitto, who left after a strategic pivot.

Technically, the stock is showing unusual momentum. It trades 47% above its 50?day moving average, yet the relative strength index sits at around 37 – far from overbought territory, suggesting the rally may have room to run. Looking ahead, Nokia has guided for revenue growth of 5% to 9% in the second quarter compared with the first, and the next hard data point arrives on July 23 with the half?year report. For now, the market is betting that Nvidia’s AI?RAN push and Nokia’s own lab?to?order progress will turn a strong narrative into sustainable earnings.

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