Nokia's Rebirth: AI Infrastructure Orders and Secure Defense Networks Propel Stock to Multi-Year Highs

Nokia's stock roars back with €1B in AI cloud orders and a defense partnership with Anduril, but investors debate whether the 141% rally is already priced in.

Nokia has roared back to life with a dual-pronged growth narrative that now stretches from hyperscale data centres to military-grade battlefield networks. Investors who dismissed the Finnish telecom equipment maker as a relic of the mobile phone era are reassessing: the stock has surged 141% since the start of the year and 178% over the past twelve months, closing at €13.42 in Helsinki on Thursday. Yet with that blistering rally comes a fresh debate — not about demand, but about how much of it is already priced in.

AI cloud orders hit the €1 billion mark

The most tangible catalyst is the explosion in orders from artificial intelligence and cloud customers. In the first quarter, Nokia’s comparable revenue rose 4% on a currency- and portfolio-adjusted basis, with the Network Infrastructure division leading the charge — up 6% year-on-year. Inside that segment, Optical Networks surged 20%, while sales to AI and cloud clients jumped an extraordinary 49%. The net effect: a flood of new orders totalling more than €1 billion from that cohort alone.

Management maintains its guidance for comparable operating profit of between €2.0 billion and €2.5 billion in 2026, with Network Infrastructure revenue expected to grow 12-14% that year. The optical and IP networking businesses are forecast to expand even faster, at 18-20% combined. Those figures rest on a simple premise: the build-out of AI data centres requires massive amounts of high-speed optical transport and routing hardware — and Nokia is positioned as a critical supplier.

A defence pivot with Anduril

Alongside the AI story, Nokia is quietly forging a second identity as a provider of secure communications for the military and critical infrastructure. At the CANSEC 2026 conference in Ottawa, the company showcased tactical 4G and 5G networks, quantum-safe encryption, and resilient digital backbones designed for drones, live situational awareness, and combat operations. This is not a consumer handset comeback; it is a play on the growing need for tamper-proof data links in contested environments.

The defence push gained concrete form in March 2026, when Nokia Belgium, COBBS BELUX, and Anduril Industries formed a consortium to develop counter-unmanned aerial systems for protecting military sites and critical infrastructure. The solution integrates radar, optical sensors, radio frequency sources, and acoustic data into a unified command-and-control layer. Quantum-safe encryption — spanning optical, Ethernet, MPLS, and IP layers — is a key selling point, as is AES-256 network encryption.

No new dollar-value contracts were announced at CANSEC, and Nokia has not set a specific revenue target for the defence business. That leaves investors waiting for measurable commercial wins to back up the strategic narrative.

Margins improve even as revenue mix shifts

The first-quarter results reveal a company that is also getting better at making money. Network Infrastructure’s gross margin climbed to 43.4% from 41.9% a year earlier. Mobile Infrastructure, where revenue dipped to €2.495 billion from €2.573 billion, still managed to boost its gross margin to 48.5% against 44.2%. The improvement suggests Nokia is not simply chasing volume but is also harvesting better pricing and product mix.

Capital expenditure for 2026 is pegged at €900 million to €1.0 billion, partly earmarked for additional manufacturing capacity in Optical Networks to support the anticipated growth.

The valuation conundrum

The stock now sits roughly 7% below its recent peak, a modest pullback that reflects a shift in tone rather than a broken story. The Helsinki benchmark index, OMX Helsinki 25, climbed above 14,000 points for the first time since December 2000, and Nokia was one of its most visible drivers. But after a 40% gain in the past 30 days alone, the market is starting to demand proof that orders can translate into rising margins and free cash flow with the same speed.

For the AI leg, the biggest test lies in the Network Infrastructure division, where Nokia must convert the €1 billion order book into sustained, profitable revenue. For the defence leg, the next milestone is a signed contract that moves the narrative from exhibition halls to the bottom line. Both stories remain intact, but the bar for conviction has risen sharply — and that is the new reality for the Nokia share.