Nokia’s 158% Rally Raises the Stakes: AI Orders Are Real, but So Is the 91x P/ E

Nokia pivots to AI-native networks with new leadership and autonomous management tools. The stock has doubled this year, fueled by strong sector demand.

In the space of a few months, Nokia has shed its legacy telecom skin and emerged as an AI infrastructure story. The transformation has been breathtaking in speed: the stock has more than doubled since the start of the year, adding 114.80% through late April, and stands 157.98% higher than 12 months ago. Yet after that kind of move, every new high invites a harder question: how much of the future is already in the price?

The answer, by one measure, is a lot. Nokia now trades at 91 times trailing earnings, up from a multiple of 35 a year ago. For a company still generating most of its revenue from network gear sold to mobile operators, that is an eye-watering premium. The bull case rests entirely on whether the AI narrative can translate into sustained profit growth.

A New Hand on the Wheel at Mobile Infrastructure

The latest signal that Nokia is serious about the shift came with a leadership appointment. Emma Falck will take over as President of Mobile Infrastructure on 1 September 2026, joining the Group Leadership Team. She arrives from Siemens, where she ran product development and supply chains for Smart Infrastructure Buildings.

The move is part of a broader reorganisation. Nokia has bundled core network, radio access network and patent portfolios into a single unit. Tommi Uitto, the former mobile networks chief, left in the reshuffle, and CEO Justin Hotard had been running the division on an interim basis.

Hotard’s vision ties the reorganisation directly to the next network cycle. He argues that as AI moves into physical applications — what he calls “Physical AI” — networks will need to be built AI-native from the ground up, whether for 5G-Advanced or 6G. Mobile Infrastructure is expected to become more software-driven, with open interfaces and a partner ecosystem rather than proprietary hardware.

Agentic AI Tools Spark a 12% Jump

The market got a vivid demonstration of that strategy midweek. Nokia unveiled new agentic AI tools for network management that can detect and fix faults autonomously, optimise performance and handle voice commands. The tools target internet service providers and home networks. The announcement sent the stock up 12% in a single session.

A second tailwind came from across the Atlantic. Cisco reported strong quarterly results and raised its forecast for AI-related orders from $5 billion to $9 billion. Cisco’s shares surged 20% after hours, and the positive read-through lifted the entire networking sector, including Nokia, which added another 7% on Thursday.

That validation matters because it broadens the AI infrastructure thesis beyond data centres. Cisco’s upgrade suggests that transport networks, access networks and automation software are also set to benefit. For Nokia, this is exactly the narrative that underpins its current re-rating.

Orders Are Piling Up

The excitement is not entirely speculative. In the first quarter of 2026, Nokia generated €4.5 billion in revenue, with comparable growth of 4%. The AI and Cloud segment grew 49% and now accounts for 8% of group sales. More tellingly, Nokia booked more than €1 billion in AI-related orders in a single quarter.

The company expects Network Infrastructure to grow 12–14% this year. Comparable gross margin came in at 45.5%, and Nokia holds net cash of €3.8 billion, giving it financial flexibility.

The medium-term target is a comparable operating profit of €2.7–3.2 billion by 2028. That would require significantly higher margins from the network infrastructure business and continued cost discipline across the group.

Valuation Becomes the Debate

None of that changes the arithmetic of a 91x P/E. Friday’s close of €11.96, down 4.13% from the previous day, looked like profit-taking after a blistering run. The 52-week high of €12.55 is only 4.70% away, but the stock now trades 39.29% above its 50-day moving average and almost double its 200-day average.

For now, the trend remains firmly intact. The 30-day gain of 38.81% is extraordinary by any standard. Whether it holds depends on how quickly the AI backlog feeds through into revenue and margins. Falck will not take the wheel until September; until then, Hotard remains directly involved in the mobile unit.

The next leg of the story will be written in execution. The market has already priced in a great deal of optimism. The question is whether Nokia can deliver the growth that the multiple demands.