Nokia’s AI Infrastructure Pivot Gains Momentum: €1 Billion in Cloud Orders and Analyst Upgrades Power 148% Rally

Nokia transforms from telecom vendor to AI infrastructure supplier, driving shares to 2008 highs with 49% revenue jump in AI and cloud segment, though profit guidance remains cautious.

The transformation playing out at Nokia is no longer a slow burn — it is a bonfire. Shares of the Finnish telecom equipment maker have surged to levels not seen since 2008, touching a 52-week high of €13.50 on Monday before settling back to €13.43 the following morning. That minor pullback did little to dent the year-to-date advance: the stock has more than doubled, with gains ranging from 141% to 148% depending on the exact pricing point. At the time of the most recent reports, the equity was changing hands at €13.79, pushing its cumulative return for 2026 toward the upper end of that bracket.

The driver is a strategic shift that has captured investor imagination: Nokia is shedding its legacy identity as a telecom equipment vendor and recasting itself as a supplier of infrastructure for artificial intelligence. The move gained concrete validation on May 21, when the company opened an AI Networking Innovation Lab in Sunnyvale, California, in partnership with AMD, Lenovo and Supermicro. The facility is designed to test and validate AI-native data center architectures aimed at hyperscalers and cloud providers seeking faster, simpler deployments.

That laboratory is more than a PR exercise — it sits atop a pile of hard revenue numbers. Nokia’s first-quarter results, released on April 23, showed that revenue from AI and cloud customers jumped 49% year over year. The segment now accounts for nearly 10% of total group sales. More striking was the order book: AI and cloud clients placed €1 billion in new orders during the quarter alone. Optical networks, a key enabler of data center interconnect, grew 20%.

Management responded by lifting its full-year growth outlook for the Network Infrastructure division to 12–14%, with the combined Optical and IP Networks units expected to expand 18–20%. Nokia also sharply revised up its estimate for the addressable AI and cloud market, from a compound annual growth rate of 16% to 27%.

Yet the rally has not been matched by a commensurate upgrade to the bottom-line forecast. The company maintained its 2026 comparable operating profit guidance of €2.0–2.5 billion, while the consensus estimate has crept to €2.364 billion. That gap between market euphoria and official caution looms as a potential reality check when Nokia reports its half-year results on July 23.

The narrative shift was accelerated by the acquisition of Infinera, an optical technology specialist that gives Nokia deeper access to the data center connectivity market. The deal positions Nokia’s hardware as a core component of what analysts now call the “AI supercycle” — the global wave of investment in computing capacity. Regulatory tailwinds have also helped: the U.S. Federal Communications Commission conditionally approved Nokia’s broadband equipment, opening the door for wider deployments in North America.

Wall Street took notice. Morgan Stanley designated Nokia a top pick, raising its price target on the U.S.-listed ADRs from $13.00 to $16.50 and maintaining an Overweight rating. CFRA followed suit, upgrading the stock from Hold to Buy and doubling its target to $16.00. Both firms emphasized that Nokia should no longer be valued as a legacy hardware supplier but rather as an optical networking company riding the AI wave.

Technically, the stock is not overextended. The relative strength index stands at 55, well below overbought territory. The 52-week low of €3.49, set in August 2025, means long-term holders have nearly quadrupled their money. The next catalyst will be the half-year report: if the second quarter confirms the acceleration in optical, IP and data center revenues, the rally will gain fundamental support. If margins disappoint, the tension between market optimism and management’s guarded guidance will become the central story for Nokia’s equity.