From Legacy Networks to AI Backbone: Nokia's Stock Surges as Investors Buy the New Story

Nokia shares surged to a 52-week high of €13.30, up 140% as it pivots to AI infrastructure with new lab, 49% cloud revenue growth, and analyst upgrades.

Nokia shares vaulted to a fresh 52-week high of €13.30 on Friday, logging a single-session gain of more than 9%. The latest leg of a rally that has now swelled the stock by nearly 140% since January reflects a fundamental repricing: the market is no longer valuing the Finnish company as a tired telecom equipment maker but as a pure-play beneficiary of a global artificial intelligence infrastructure buildout.

The immediate catalyst came on May 21, when Nokia unveiled its AI Networking Innovation Lab in Sunnyvale, California. The facility is designed to accelerate development of high-performance networking gear for hyperscale data centres, and the company has enlisted an array of high-profile partners — AMD, Keysight, Lenovo and Supermicro — to collaborate on next-generation solutions. With the lab up and running, Nokia is effectively planting a flag in the heart of Silicon Valley, signalling that its future lies squarely in the racks of GPU clusters and optical interconnects rather than the base stations of fading mobile networks.

That strategic pivot is already showing up in the order book. Telefónica has named Nokia the exclusive supplier for 17 new edge data centres in Spain, most of which are already live and supporting AI-powered services. In the first quarter of 2026, the company’s revenue from cloud and AI customers jumped 49% year-on-year, propelling total group sales to €4.5 billion. Meanwhile, the Network Infrastructure segment grew 6%, powered by a 20% surge in optical networking — precisely the technology that sits at the heart of modern AI fabrics.

Profitability is keeping pace with the top line. Nokia’s comparable operating margin widened by 200 basis points to 6.2%, and management felt confident enough to lift the full-year growth outlook for network infrastructure to as much as 14%, citing sustained demand for optical systems. Comparable earnings per share rose to €0.05 from €0.03 a year earlier, reinforcing the notion that the margin improvement is not a one-off but part of a structural shift.

Analysts have responded by recalibrating their models. Morgan Stanley raised its price target from €11 to €14 while reaffirming an “overweight” rating, explicitly framing Nokia as a primary beneficiary of global AI infrastructure spending rather than a telecom dinosaur. The same revaluation logic has drawn comparisons with pure-play optical and AI networking firms, a comparison that would have seemed far-fetched only two years ago.

Away from the commercial data-centre push, Nokia is also cementing its credentials in government and defence. In Estonia it is building a 5G extension for the national Cyber Range operated by the Ministry of Defence, where its software will simulate cyber-attacks and probe for vulnerabilities. And in India, the company is providing the core technology for Bharti Airtel's premium services through network slicing — a technique that sets aside dedicated capacity for contract customers, though local regulators are still examining its compliance with net neutrality rules.

On the US front, Nokia secured conditional FCC approval for its home broadband equipment, exempting its beacons and optical network terminals from “Covered List” restrictions that had previously hampered the rollout. The company also announced plans to manufacture next-generation Wi-Fi 8 gateways stateside. On the leadership front, Emma Falck will take the reins of the Mobile Infrastructure division in September, a move widely seen as a vote of confidence in a 5G/6G strategy that is now emphatically AI-native.

With a record order backlog and a clear focus on high-margin data-centre business, Nokia has laid the groundwork for a sustained re-rating. The stock is already trading at the upper end of analyst expectations, and whether the laboratory, the regulatory wins and the strong quarterly numbers can be converted into a steady stream of new contracts will determine whether the current 52-week high proves to be a floor or a ceiling.