Nokia's Makeover Gains Traction as Defense, Cloud and Antenna Wins Pile Up

Nokia shares climb 65% year-to-date as the telecom supplier expands into defense, AI data centers and software beyond mobile networks.

For years, Nokia carried the reputation of a plodding telecom supplier with little in the way of growth appeal — a turnaround story that many investors treated as short on real upside. That perception is now being tested on multiple fronts at once.

The Finnish group's shares climbed 2.7% in the previous session to close at EUR 9.17, a move that reflects more than a fleeting burst of market enthusiasm. Nokia is steadily planting flags in higher-margin territory beyond its traditional mobile radio business, and the results are beginning to show in both its order book and its share price.

A Push Into Defense and Software

Among the more notable strategic shifts is Nokia's move into government security structures and the digital overhaul of defense forces. Its Nokia Defense unit is working with C3IA on a modernization program for the British armed forces, an agreement signed at the DVD industry event. In parallel, an expanded partnership with Microsoft will link the Nokia Data Suite with Microsoft Fabric for telecom network automation.

These initiatives amount to a long-overdue pivot. Pure network equipment sales to mobile operators have been squeezed for some time by trimmed budgets at the major carriers. State-backed defense projects and software-driven automation, by contrast, open up customer bases that must keep spending even when the broader economy sours — a shift that is gradually loosening Nokia's reliance on the classic mobile market.

Order Book Backs the Story

The strategic repositioning is no longer just a statement of intent. In the second quarter of 2026, Nokia booked orders worth EUR 2.8 billion for AI and cloud projects in data center construction, giving the company reliable revenue visibility stretching into 2027. AI data centers demand enormous bandwidth and dependable network infrastructure, and Nokia stands to benefit from a structural trend that largely runs independent of short-term economic cycles.

Transmission technology is adding to the momentum. Nokia is supplying optical transport gear to Telxius — a deal announced roughly two weeks ago that has since helped lift the stock 6.8% — with 800G optical solutions deployed across Telxius's terrestrial networks in Europe, the US and Latin America. While traditional network investment often stalls, the global upgrade of critical data networks is working in Nokia's favor, strengthening its market position and brightening the margin outlook.

Vodacom Trial Tackles a Physical Bottleneck

Nokia's radio business is not standing still either. In South Africa, the company completed a field trial of an integrated antenna technology with operator Vodacom, a test the partners describe as a world first for the Western Cape region. At the heart of the pilot is a compact mobile antenna that combines passive elements with active Massive-MIMO technology, operating simultaneously on the 2600 MHz and 3500 MHz bands. The goal: extra capacity for 4G and 5G networks without requiring more mounting space.

That matters because many carriers are running into the physical limits of existing masts and rooftop sites, where additional installations often founder on structural constraints or regulatory caps. Vodacom plans to deploy the new antenna at selected locations where heavy demand meets tight space, expecting higher data rates and more stable traffic in busy urban areas. Neither partner has disclosed specific sites or a firm installation timetable.

A Broader Rebuild Under Hotard

The Vodacom project fits into a wider effort to offer carriers tailored solutions for denser network architectures. Under CEO Justin Hotard, Nokia has sharpened its focus on linking data centers with AI infrastructure, with the acquisition of Infinera marking a central step along that path. The company is also modernizing existing networks through software platforms such as Deepfield Cloud Intelligence, which gives operators deeper insight into encrypted traffic.

Not everyone is convinced the story is fully priced in. Analysts at UBS have urged caution on the data center division, warning that part of the expected growth may already be reflected in the valuation and that tighter regulation in regions such as the US or Spain could slow investment. Even so, the classic mobile network equipment business remains Nokia's largest pillar.

The Bar Is Rising

With a gain of 64% since the start of the year — and a further 3.5% advance today to EUR 9.24, bringing the year-to-date rise to 65% — the share price already mirrors investors' renewed confidence. That very strength creates a growing hurdle: expectations have been raised noticeably, leaving little room for disappointment when results arrive.

The next milestone comes on October 22, 2026, when Nokia reports third-quarter figures. That release should show how forcefully the new growth fields are feeding through to operating profit. Until then, the fundamental picture — margin-rich defense work and long-term cloud contracts — argues in the company's favor.