Nokia’s Twin Bets on AI and Military Networks Face a Reality Check in Boston

Nokia stock surges 40% on AI data-center and military comms bets. New CEO must prove rally is sustainable with Infinera integration and Lockheed Martin deal details.

Nokia has ridden two powerful narratives to more than double its share price this year — the boom in AI data-center infrastructure and a surprise push into secure military communications. But both stories face a crucial test next week when the Finnish company’s new chief executive takes the stage at the J.P. Morgan Global Technology, Media and Communications Conference in Boston.

Chief Executive Justin Hotard is scheduled for a fireside chat with investors, while the investor relations team holds parallel meetings in Paris. The market wants hard proof that the rally — which has propelled the stock to a fresh high of €11.72, up 39.75% in a single month — is built on more than just hope. On the agenda are the integration of optical-networking specialist Infinera, the partnership with Nvidia on AI-RAN technology, and concrete demand for high-speed transport networks that shuttle data between cloud data centers.

At the same time, Nokia is pushing into an entirely new vertical. A recently announced strategic partnership with Lockheed Martin will develop secure 5G and 6G communications solutions for the U.S. military, with a deal expected to close in the fourth quarter of 2026. The financial contribution remains negligible in the near term, but the signal is unmistakable: Nokia is deliberately widening its addressable market beyond traditional telecom carriers into defense, a sector with growing appetite for protected mobile networks.

The company’s first-quarter results offer a mixed foundation for both narratives. Revenue rose 4% to €4.5 billion, with the AI and cloud segment surging 49%. In dollar terms, revenue reached $5.26 billion, slightly below the consensus estimate of $5.40 billion, though earnings per share jumped 67% to $0.06. Free cash flow came in at €629 million, giving Nokia ample financial room to fund the Infinera integration and further infrastructure investments. Network Infrastructure guidance was lifted to 12–14% growth, with the Optical and IP Networks division expected to expand by 18–20% as hyperscalers ramp up capital spending.

Management has also been tidying up the portfolio. The sale of the Fixed Wireless Access business to Inseego underscores a sharper focus on high-growth infrastructure, freeing up both capital and management attention for the AI and defense push.

Analysts are scrambling to catch up with the rally. JPMorgan lifted its price target from €6.90 to €12 and reiterated an “Overweight” rating. Argus upgraded the stock to “Buy” with a $15 target, citing demand for AI networking hardware. Institutional interest is palpable — 125.8 million shares changed hands recently, roughly 70% above the three-month daily average.

Technically, the stock is flying high. It closed at €11.72, 36% above its 50-day moving average of €8.15 and 100.78% above the 200-day line. Even after the latest surge, the 30-day annualized volatility runs at about 58%, and the relative strength index stands at 61 — elevated but not yet in overbought territory.

Internal incentives also align with shareholder interests. Following a shareholder meeting resolution, a portion of annual board compensation will now be paid in shares, tying director pay more directly to stock performance.

The Boston conference will determine whether the market’s enthusiasm can be sustained. If Hotard can back up the AI and defense pivot with tangible milestones — on the Infinera integration, the Nvidia collaboration, and optical-network orders — the re-rating will look justified. Without detailed proof, investors may begin to question how much of the gain already reflects hope rather than operational delivery.