Nokia’s Twin-Track Strategy: AI Lab Innovation and Optical Fiber Expansion Power 141% Rally

Nokia launches AI lab with AMD, Lenovo, and partners with Lightera for optical LAN, driving a 141% stock rally and 49% order growth.

Nokia is no longer content to be seen as just another telecom equipment maker. In a matter of months, the Finnish company has recast itself as a critical infrastructure provider for the AI era, and the share price has responded in kind — surging 141% since the start of the year. Behind that rally lies a carefully coordinated push on two fronts: a new co-innovation lab in California targeting hyperscale AI workloads, and a European partnership aimed at dragging corporate networks into the optical fibre age.

The company has opened an AI Networking Innovation Lab in Sunnyvale, California, where it will develop and test network architectures purpose-built for distributed AI processing. The facility focuses on advanced switching chips, automation and real-time monitoring — the building blocks that make AI workloads scalable across multiple locations. Crucially, Nokia is not working in isolation. AMD, Lenovo, Supermicro, Keysight and VIAVI have been brought in as partners to validate multi-vendor designs and reduce deployment risks for cloud providers. This is no marketing showcase; it is an industrial-grade testing ground.

At the same time, Nokia is pushing deeper into the enterprise market with a fresh collaboration. It has teamed up with Lightera, an infrastructure specialist, to market optical LAN solutions to European companies. The deal pairs Lightera’s expertise in passive optical infrastructure with Nokia’s PON technologies — GPON, XGS-PON and 25G-PON — to replace traditional copper-based office networks. The package includes consultation, installation, round-the-clock technical support and training. Neither side disclosed financial terms, so the immediate revenue impact remains unclear, but the strategic direction is evident: Nokia is betting that the bandwidth demands of AI will spill over from data centres into everyday business premises.

The market has already taken notice. Nokia shares closed at €13.49 on the latest trading day, just 4.6% below the 52-week high of €14.14 set on May 26. The stock currently trades at more than double its 200-day moving average of €6.37, a clear sign of the re-rating that has taken place — and the high bar now set for delivery.

That delivery is being underpinned by solid first-quarter numbers. Nokia reported free cash flow of €0.6 billion and a net cash position of €3.8 billion. Diluted earnings per share came in at €0.05 — modest, but positive. More tellingly, the company saw a 49% jump in orders overall, a figure that captured the surge in demand for its networking gear. Within that, revenue from AI and cloud customers climbed at the same 49% rate and now accounts for 8% of group sales. In this segment alone, Nokia booked orders worth €1 billion in the first quarter.

The optical networks division, a key beneficiary of this shift, recorded a 20% increase in comparable net sales on a constant-currency basis. That momentum is expected to continue. For the full year 2026, Nokia targets comparable operating profit between €2.0 billion and €2.5 billion. The Network Infrastructure segment is forecast to grow 12% to 14%, while Optical Networks and IP Networks together are seen expanding 18% to 20%. In the second quarter, management expects sequential revenue growth of 5% to 9%, driven largely by the Network Infrastructure division, supported by optical technology and a separate 5G partnership with Lockheed Martin for security-critical applications.

The share’s explosive climb has also brought higher volatility, partly attributed to increased retail activity — including discussions on Reddit. But behind the noise, Nokia’s transformation is measurable. The Sunnyvale lab will not immediately alter the income statement, and the Lightera deal alone will not shift those guidance figures. The real test will come when Nokia converts these partnerships and new products into recurring enterprise orders, proving that its optical growth story extends beyond carriers and cloud data centres. The second-quarter results, due later this year, should offer the first meaningful read on whether the strategy is gaining traction.