Nvidia's Quiet Nokia Stake Adds Fuel to a Turnaround Already Gaining Momentum

Nvidia reveals multibillion-euro stake in Nokia; JPMorgan sees 100% upside as AI orders surge, despite costly China exit.

The disclosure arrived via a routine regulatory filing, but its implications were anything but routine. Nvidia has built up a stake in Nokia worth billions of euros, a position revealed in a Form 13F filing that signals the chip giant's growing interest in the Finnish network equipment maker's AI infrastructure ambitions.

The timing could hardly be more telling. Nokia's shares have already more than doubled over the past twelve months, climbing 139 percent, and the stock now trades at 8.86 euros following a 3.8 percent advance across the last seven trading sessions. Yet even after that run, the shares sit well below their 3 June peak of 14.97 euros, leaving room for further upside if the AI story continues to build.

Wall Street Sees Room to Double

JPMorgan has emerged as one of the more vocal bulls, reaffirming Nokia as a top pick on 25 August with an Overweight rating and a $21 price target — implying roughly 100 percent upside from prevailing levels at the time. The bank's confidence rests on the company's AI and cloud momentum, resilient cloud demand, and a multi-year order pipeline that extends into 2027 and 2028.

The second-quarter numbers give that optimism some concrete backing. Revenue rose 9 percent year-on-year to 4.82 billion euros, while comparable earnings per share doubled from 0.04 to 0.07 euros. The standout performer was the AI & Cloud division, which booked 2.8 billion euros in orders and nearly doubled its revenue. Management expects roughly half of those orders to convert into revenue within the next twelve months.

Independent validation has also arrived. In Omdia's "Market Landscape: Core Vendors" report, Nokia was named the leading provider of mobile core portfolios for the second consecutive time, earning top marks across all seven competitive categories assessed, including cloud-native maturity, automation, and AI/ML analytics.

The China Exit Comes With a Price Tag

The AI growth story, however, runs parallel to a deliberate retreat from China — and that pullback is proving expensive. Nokia plans to close its research center in Hangzhou along with additional sites in Beijing, Chengdu, Qingdao, and Shanghai by the end of 2026, eliminating roughly 1,600 research and development positions. Remaining activities will fold into Nokia Shanghai Bell, the joint venture Nokia fully acquired at the end of 2025.

Restructuring costs for the current year are expected to reach approximately 800 million euros, with around 350 million euros tied specifically to the China integration. Against those charges, Nokia anticipates annual savings of roughly 200 million euros from the scaled-back presence. The financial logic is straightforward, even if the execution is painful.

The scale of the decline explains the urgency. Revenue from Greater China has fallen from approximately 2.2 billion euros in 2018 to 913 million euros in 2025 — a drop of more than 58 percent — and the company's market share there now sits below 3 percent as domestic competitors dominate.

Legal Relief and Insider Confidence

While the restructuring unfolds, Nokia secured a meaningful legal victory in Texas. A federal jury ruled in favor of AT&T, Verizon, and T-Mobile in a patent dispute with Asus, while simultaneously clearing Nokia and Ericsson of allegations that they violated licensing obligations related to standard-essential patents. The verdict matters because patent licensing remains a substantial earnings component for Nokia.

Management's own conviction is visible in their trading activity. Several senior executives, including Victoria Hanrahan, Stephan Prosi, and Louise Fisk, purchased Nokia shares on the Helsinki exchange in mid-August at prices around 9.09 euros — purchases made just days before the Nvidia news gave the stock an additional lift. The company also transferred 3,635,260 treasury shares to participants in existing equity plans on 27 August, a transaction authorized by the board back in October 2025.

A Story Still in Motion

The market's reaction to this confluence of factors has been mixed in the near term. The stock closed at 8.84 euros on a recent Friday, down 3.3 percent on the day, as investors weighed restructuring charges against the raised guidance. Nokia now expects 2026 operating profit in a range of 2.1 to 2.6 billion euros, an upgrade driven by the AI order surge.

What investors are really assessing is whether the annual savings from the China exit will justify the substantial one-time costs. The strengthened profit forecast and the influx of AI orders offer encouraging signals, but the full picture will only become clear as quarterly results continue to roll in. With Nvidia now holding a stake and JPMorgan calling for a doubling, the market's attention is firmly fixed on whether Nokia can convert its repositioning into sustained earnings growth.