Nokia’s Stock Surges to 16-Year High as AI-Led Pivot Gains Momentum With FastMile Sale

Nokia offloads FastMile to Inseego via share swap, doubling down on AI infrastructure with Nvidia. Shares rally 144%, but valuation concerns persist.

Nokia is reshaping its business with surgical precision, offloading a legacy hardware unit while doubling down on the artificial intelligence infrastructure boom. The Finnish telecom equipment maker’s decision to sell its fixed wireless access (FWA) business — the so-called FastMile division — to US-based Inseego underscores a clear strategic shift toward higher-growth, higher-margin AI and cloud opportunities. The deal, structured partly as a share swap rather than an all-cash transaction, will hand Nokia an 11% stake in Inseego, with the transaction expected to close in the fourth quarter.

The move comes on the heels of a blistering rally that has lifted Nokia shares to levels not seen in 16 years. The stock closed at €10.87 on Friday, marking a 144% gain over the past twelve months and a near-doubling since the start of the year. Much of that enthusiasm traces back to Nvidia’s multi-billion-dollar investment in the company at roughly €6 per share — a stake that now sits on a paper profit of nearly 80%.

At the heart of the partnership is the integration of Nvidia’s artificial intelligence and graphics processing technology into Nokia’s 5G network portfolio. Together, the two are developing AI-RAN solutions — AI-powered mobile infrastructure designed for 5G-Advanced and future 6G standards. While the collaboration has generated considerable buzz, the financial impact remains nascent: only about 8% of Nokia’s first-quarter revenue came from its AI and cloud segment.

Yet the market backdrop could hardly be more favourable. Hyperscalers are expected to pour over $700 billion into AI infrastructure by 2026, and Nokia is positioning itself as a key supplier of the networking technology that will connect those massive data centres. The promise of that pipeline has filtered into the company’s order books. In the first quarter, sales of optical networks climbed 20%, and the firm secured billions of euros in orders from the cloud and AI sector alone.

For the full year, management is sticking to its guidance of an operating profit above €2 billion, with network infrastructure growth expected to hit double digits. The next major checkpoint comes on July 23, when Nokia reports second-quarter results. Analysts will be watching closely to see whether the forecast sequential revenue increase of up to 9% materialises.

That level of ambition, however, has stretched the stock’s valuation. With a price-to-sales ratio above three, investors are already pricing in substantial future growth — leaving little room for error. Barclays recently lifted its price target from €5.20 to €8.00 but maintained an “underweight” rating, signalling that the current share price looks overextended. By contrast, Arete upgraded the stock to “buy” with a €10.60 target, though that target has already been surpassed.

Technical indicators paint a mixed picture. The stock trades 35% above its 50-day moving average, and an RSI of 61.7 suggests the rally is not yet overheated. But an annualised volatility of nearly 59% underscores how quickly sentiment can shift. The next psychological resistance sits around €11.50, close to the 52-week high. Whether Nokia can break through depends heavily on how rapidly the AI business evolves from a marginal revenue contributor into a genuine earnings pillar.

Nokia also faces fierce competition from Ericsson and Huawei in the global network equipment market, and the company recently tweaked its leadership structure in Brazil, appointing Hugo Baeta as country director to replace Rafael Mezzasalma, in a bid to strengthen regional growth. While the FastMile sale streamlines the portfolio, the underlying challenges — unpredictable telecom capex cycles and an intensely competitive landscape — remain. Inseego, meanwhile, expects the acquisition to roughly double its revenue, and the two companies plan joint 6G development work going forward.

Nokia’s bet on AI infrastructure is clear, but the market will be watching closely to see whether the financial breakthrough arrives as quickly as the stock price suggests.