AI boom drives Nokia shares to 16 year high after strong earnings

The story around Nokia is changing fast, and it is no longer just about telecom networks or legacy hardware. The company is now leaning heavily into artificial intelligence infrastructure, which is rapidly becoming one of the most valuable parts of the global tech economy.

This shift is being powered by hyperscalers, the massive cloud companies building out AI data centers at an aggressive pace. These companies need advanced networking gear, and Nokia has positioned itself right in the middle of that demand wave.

Strong earnings spark a market reaction

Nokia’s latest quarterly results sent a clear signal to investors that its strategy is working. Comparable operating profit jumped 54 percent to 281 million euros in the first quarter of 2026, beating analyst expectations of around 250 million euros.

That performance immediately translated into market momentum, with shares rising nearly 7 percent in early trading. The stock reached its highest level since April 2010, marking a symbolic moment for a company that has gone through multiple reinventions over the past decade.

AI infrastructure is driving real revenue growth

The biggest driver behind Nokia’s performance is not just hype around AI, but actual revenue tied to it. Sales linked to AI and cloud customers climbed 49 percent, showing that demand is already material and not just future potential.

The company also reported 1 billion euros in new orders from these segments, reinforcing the idea that AI infrastructure is becoming a stable and growing business line. This demand is largely tied to fiber optic networks that connect massive data centers across regions.

From phones to fiber and beyond

Nokia’s transformation has been years in the making, moving far beyond its identity as a mobile phone brand. After exiting the handset business, it focused on network equipment and later expanded deeper into advanced connectivity solutions.

A key move in this transition was its acquisition of Infinera, a U.S.-based company specializing in optical transport systems. This deal helped Nokia strengthen its position as a major player in high-capacity data transmission, which is critical for AI workloads.

Optical networks become the backbone of AI

AI systems require enormous amounts of data to move quickly and reliably, and that is where optical networks come in. These systems use fiber optics to transmit data at extremely high speeds, making them essential for modern AI infrastructure.

Nokia has become one of the leading manufacturers in this space, allowing it to benefit directly from the surge in AI-related spending. As more companies build data centers, the need for these networks continues to rise.

Nokia raises its AI growth expectations

One of the most notable updates from the company was its revised outlook for the AI and cloud market. Nokia now expects this segment to grow by 27 percent annually between 2025 and 2028, a sharp increase from its earlier estimate of 16 percent.

This change reflects stronger-than-expected demand and a more optimistic view of long-term AI adoption. It also signals confidence from the company that its investments and positioning will continue to pay off.

Network infrastructure outlook gets a boost

The company also raised its expectations for its broader network infrastructure segment. Nokia now forecasts growth of 12 to 14% this year, up from its earlier projection of 6% to 8%.

This upgrade is largely driven by strong performance in its optical and IP networks businesses. These areas are closely tied to AI expansion, further showing how central artificial intelligence has become to the company’s future.

CEO signals confidence in full-year performance

CEO Justin Hotard emphasized that the company is tracking slightly above the midpoint of its full-year outlook. Nokia expects comparable operating profit to land between 2.0 billion and 2.5 billion euros for 2026.

This guidance suggests steady momentum rather than a one-time spike, which is important for investor confidence. It shows that the AI-driven growth is likely to continue throughout the year.

Little-known fact: Nokia was originally founded in 1865 as a pulp mill in Finland, long before it entered electronics and telecom.

Big Tech spending fuels the entire ecosystem

The broader AI boom is not limited to Nokia, but the company is clearly benefiting from industry-wide trends. Big Tech firms are expected to invest more than 600 billion dollars in AI infrastructure this year alone.

That level of spending creates ripple effects across the supply chain, from chips to networking hardware. Nokia’s role in providing connectivity solutions puts it in a strong position to capture a share of that investment.

Competition remains intense in network hardware

Despite its strong performance, Nokia operates in a highly competitive market. It faces rivals such as Ericsson, Cisco, and Arista, all of which are also targeting AI-driven growth opportunities.

This means that maintaining its edge will require continuous innovation and strategic investments. The race to support AI infrastructure is becoming one of the most important battles in the tech industry.

Investors chase the next AI winners

The surge in Nokia’s stock reflects a broader trend in financial markets, where investors are eager to identify companies tied to AI growth. There is a growing sense of urgency, often described as fear of missing out, driving capital into these stocks.

Nokia’s results provided a concrete example of how AI demand can translate into real financial gains. That makes it more attractive to investors looking for exposure beyond traditional tech giants.

The comeback story few expected

Nokia’s journey from a struggling phone maker to a key AI infrastructure player is a reminder of how quickly the tech landscape can change. The company has managed to reinvent itself by aligning with long-term industry shifts.

Its ability to pivot toward high-growth areas like AI networking has given it a second life in the market. Few would have predicted this kind of comeback just a decade ago.

Little-known fact: Nokia sold its mobile phone business to Microsoft in 2014 for about $7.2 billion, marking its exit from the handset market.

A new chapter powered by AI

Nokia’s latest results highlight a broader transformation taking place across the tech sector. AI is not just changing software and applications, but also the physical infrastructure that powers them.

As demand continues to grow, companies like Nokia are becoming critical enablers of this new era. The real question now is not whether AI will drive growth, but how long this momentum can last and who will benefit the most.

TL;DR

• Nokia’s strong earnings highlight how AI demand is reshaping its business, with profits beating expectations and signaling real momentum.
• Surging demand from cloud companies building AI data centers helped push the stock to a 16-year high, reflecting growing investor confidence.
• AI and cloud-related sales are rising quickly, showing that this growth is already happening, not just a future bet.
• With higher long-term forecasts and massive industry spending ahead, Nokia is becoming a key player in the global AI infrastructure race.

This article was made with AI assistance and human editing.

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