Nokia’s Sunnyvale AI Lab and €1 Billion Quarterly Orders Ignite Analyst Upgrades

Nokia reports €1B in AI cloud bookings, opens Sunnyvale innovation lab, stock surges 119% YTD as analysts upgrade targets amid strong Q1 profit beat.

Nokia’s push into the heart of the AI infrastructure boom is gathering pace, with a new innovation hub in California and a surge in quarterly orders convincing Wall Street to raise its sights. The Finnish networking group reported that first-quarter bookings from cloud and artificial-intelligence clients topped €1 billion, a 49% jump in revenues from that segment — momentum that has propelled the stock 119% higher since the start of the year.

The company this week opened an AI Networking Innovation Lab in Sunnyvale, Silicon Valley, where it will work with partners including AMD, Lenovo and Supermicro to develop faster data protocols and new silicon chips. The lab is designed to tackle the bandwidth bottlenecks that choke large-scale AI training workloads inside data centres. Nokia intends to use the facility to set industry-wide standards, allowing customers to scale their models more efficiently.

The operational payoff is already visible. Nokia booked an operating profit of €281 million in the first quarter, comfortably beating market forecasts, and raised its long-term growth projection for the AI business to an annual rate of 27% through 2028. Management has earmarked roughly €1 billion for capital spending this year, largely to expand its optical networks, a division that benefits directly from the AI investment cycle. With €5.5 billion in cash reserves against long-term debt of €2.3 billion, the balance sheet leaves plenty of room for the build-out.

The changing profile of the business has prompted a flurry of analyst revisions. JPMorgan hiked its price target from €6.90 to €12, while Morgan Stanley now sees the stock at €11. CFRA was even more aggressive, upgrading Nokia to “Buy” and doubling its target to $16 — effectively valuing the company alongside highly profitable optical-networking specialists. Shares closed at €12.18 on Wednesday, just shy of their 52-week high, though a mild pullback to €11.71 was seen the following day after the initial surge.

Competition remains fierce. Cisco has reported AI orders worth more than $5 billion, and Arista Networks continues to press Nokia in the data-centre market. Yet investors have largely shrugged off the gap. A €1 billion investment by Nvidia last October helped ignite the rally, and the stock now trades well above its 200-day moving average of €6.17. For the full year 2026, management is guiding for operating profit between €2.0 billion and €2.5 billion, with network infrastructure expected to deliver double-digit growth.

Nokia’s Sunnyvale lab is more than a technical showcase — it is a signal that the company intends to compete for the next wave of data-centre spending, betting that its own silicon and standard-setting ambition can narrow the distance to the leaders.