Nokia’s Agentic AI Pivot Rewrites Its Valuation Story as Cisco’s Surge Adds Fuel

Nokia unveils agentic AI for fixed-line networks, stock hits €12.60 (16-year high). With 126% YTD gains, Cisco's AI surge and analyst upgrades fuel re-rating.

The Finnish telecom equipment maker is shedding its reputation as a legacy-hardware vendor at a pace that has caught even bullish analysts off guard. Nokia’s share price hit €12.60 this week — a 16-year high and a gain of more than 126% since the start of the year — as the market latches onto a fresh narrative centred on artificial intelligence.

That narrative gained concrete form when Nokia unveiled what it calls “agentic AI” systems for managing fixed-line networks. The autonomous agents, embedded in the Altiplano, Corteca and Broadband Easy platforms, can diagnose faults, perform root-cause analysis and trigger operational workflows without human intervention. The company claims the system draws on data from more than 600 million broadband lines installed globally, and it has set specific efficiency targets: over 50% of helpdesk queries resolved at first contact, and a 50% reduction in technician revisits. For telecom operators, the promise is that fibre rollouts can accelerate without a matching rise in operating costs.

The strategic shift is not just a product announcement. Nokia has nearly doubled its growth projection for the AI and cloud networking segment, now eyeing a compound annual growth rate of 27% through 2028, up from 16% previously. The first quarter of 2026 already delivered a 49% year-on-year jump in revenues from AI and cloud customers, and new orders in that segment reached €1 billion. The global telecom AI market is expected to hit about $6.2 billion by 2030, and Nokia is positioning itself to capture a meaningful slice.

That internal momentum has been supercharged by an external catalyst. Cisco, a direct competitor in routers, switches and pluggable transceivers, reported quarterly revenue of $15.84 billion and adjusted earnings of $1.06 a share, with networking products growing 25%. More telling was the outlook for AI: Cisco raised its full?year AI order forecast from $5 billion to $9 billion, and AI infrastructure orders surged 152% year?on?year. Jefferies technology specialist William Beavington noted that a robust Cisco outlook is a positive signal for Nokia’s own prospects, especially given the visible revival of telecom carrier orders.

The market’s re-rating has been swift. Nokia’s trailing price-to-earnings ratio now stands near 91, a level that demands sustained execution. Gross margin came in at 45.5%, net liquidity at €3.8 billion, and the stock currently trades roughly 50% above its 50-day moving average. A wave of analyst upgrades reflects the shift in perception. JPMorgan lifted its price target from €6.90 to €12.00, sticking with “Overweight.” Argus initiated coverage with a “Buy” rating and a $15 target. Morgan Stanley raised its target from €8.50 to €11.00, also keeping a constructive stance.

Looking ahead, Nokia’s roadmap includes “AI-native” networks for 5G Advanced and the future 6G standard. The integration of recently acquired Infinera should strengthen the optical networking business, which is increasingly critical for linking AI data centres. Whether the margin improvements implied by the current valuation materialise in the next quarterly report will be the key test. For now, the market is betting that Nokia’s transformation from a hardware cyclist into an AI infrastructure player has only just begun.