Nokia's Stock More Than Doubles as Autonomous AI Networks and Cisco's $9 Billion Outlook Signal a New Chapter

Nokia's new Agentic AI tools and Cisco tailwind drive a 115% stock surge, but a P/E above 100 and ambitious 2028 targets fuel valuation concerns.

Nokia has long been a cautionary tale of a fallen tech giant, but a radical pivot toward artificial intelligence infrastructure is rewriting that narrative. The Finnish networking equipment maker, once synonymous with missed smartphone trends, has seen its shares surge roughly 115% since the start of the year, hitting a 52-week high of €12.55 in mid-May before closing the week at €11.95 as profit-taking trimmed gains.

The latest catalyst came midweek when Nokia unveiled a new suite of autonomous network management tools powered by what it calls "Agentic AI." These systems diagnose and fix connectivity glitches without human intervention — often before customers even notice an outage. The market responded immediately, sending the stock up 12% on Tuesday alone. Nokia says the software can slash costly on-site technician visits by half and dramatically improve first-contact resolution rates.

Cisco’s Tailwind and Cloud Revenue Surge

Parallel momentum arrived from across the Atlantic. Cisco Systems, a key rival in routers and switches, smashed quarterly expectations and raised its AI-related order forecast to $9 billion. Jefferies analyst William Beavington called the outlook a powerful signal for the entire sector, noting that both companies compete directly in data center networking gear.

Nokia’s own numbers are backing the hype. In the first quarter of 2026, revenue from AI and cloud customers jumped 49%, prompting management to lift its medium-term growth target for that segment to 27% annually. The acquisition of Infinera has also bolstered profitability: adjusted gross margin now stands at nearly 46%, and the company holds €3.8 billion in net liquidity, providing ample firepower for further investments and dividend payments.

Portfolio Pruning and Valuation Reality

To sharpen its focus, Nokia is selling its fixed wireless access business to U.S. firm Inseego in exchange for a minority stake. The deal is expected to close in the fourth quarter of 2026 and underscores the strategic shift toward higher-margin technologies such as 6G and edge computing.

Yet the ferocity of the rally has triggered valuation concerns. Nokia’s price-to-earnings ratio has nearly tripled over the past year, now exceeding 100. European analysts have set an average price target of just €9.01 — a steep discount to current levels. To justify the premium, Nokia must hit ambitious targets: operating profit of roughly €3 billion by 2028, supported by margins of at least 13% in network infrastructure and aggressive cost-cutting across the group.

Technical Support and Retail Frenzy

After Friday’s pullback, the stock remains about 39% above its 50-day moving average. Traders are watching the €10.80 level closely: holding that support keeps the uptrend intact, while a break below would flash a clear sell signal. The surge has also ignited retail interest, with message volumes on financial platforms spiking as individual investors pile into what many see as an overlooked AI beneficiary.

For now, Nokia is enjoying a moment in the spotlight that few would have predicted a year ago. The fundamental question is whether the company can deliver enough operational fireworks to close the gap between its stock price and the analysts’ more cautious estimates.