NOK Stock: Is Nokia Back?

Is Nokia [NOK] the next AI networking success story?

Finland’s telecommunications giant made a name for itself in the late 1990s for its popular, virtually indestructible mobile phones. However, their popularity peaked in the early 2000s, and the firm gradually fell behind as the market pivoted to smartphones, such as the Apple [AAPL] iPhone, released in 2007. Almost two decades later, the Nokia phone has achieved meme-worthy status, but seems a relic of a bygone era. 

In recent months, however, investors are realising that there’s more than tech nostalgia behind a boost in the NOK share price. 

While the company continues to release new models of its once market-leading phones, a more significant transformation has happened behind the scenes. Today, mobile networking infrastructure (including 5G), software and IP licensing represent Nokia’s core revenue streams, while the February 2025 acquisition of optical networking firm Infinera has allowed it to muscle its way into the booming artificial intelligence (AI) infrastructure market. 

Here, we examine what’s new for this old name ahead of its Q2 2026 earnings on 23 July.  

Beyond the brick

Backed by Infinera’s optics portfolio and an alliance with almost everyone’s favourite partner, Nvidia [NVDA], Nokia’s strategic refocusing on AI networking has clearly entered a new chapter. 

The Nvidia partnership, announced in October 2025, involves an investment of $1bn from the chipmaking giant to accelerate the development of AI-native mobile networks and the transition from 5G to 6G. In mid-July, Nokia unveiled the first commercial AI-powered radio access network, or AI-RAN. Built on Nvidia’s platform, AI-RAN is expected to significantly boost the amount of data telecom operators can transmit over existing network infrastructure, delivering more than 100% spectral efficiency gains by 2028.  

Nokia’s AI focus does not end with Nvidia, however. It has rolled out AI agents across its Altiplano, Corteca and Broadband Easy fixed network platforms, including through a partnership with Alphabet’s [GOOGL] Google Cloud to use Gemini models. In May 2026, it founded an innovation lab with partners such as Advanced Micro Devices [AMD] and Lenovo [LNVGY] to accelerate AI data centre networking advances. Then, in June, it expanded a partnership with Amazon [AMZN] Web Services to improve autonomous networks for AI workloads. 

Q1 2026 figures, reported in April, showed early signs of increased AI-related demand. Net sales rose just 4% year-on-year, but optical networks sales grew 20%, while sales from AI and cloud customers swelled 49%, with €1bn worth of sales booked in the quarter. 

For the full year, management updated network infrastructure sales growth to 12-14%, up from previous guidance of 6-8%, and optical and IP networks sales growth to 18-20%, from 10-12%. The company is also putting money where the growth is, with capital expenditure of up to €1bn expected to support optical networks manufacturing capacity in 2026. Full-year operating profit is expected to fall in the €2bn-2.5bn range, compared to the €2bn reported in 2025. 

For Q2, investors will be keen to see clear signs of sustained optical and AI growth offsetting weak growth in telecoms infrastructure. Additionally, following a weak report from competitor Ericsson [ERIC], management will be keen to allay fears that rising AI component costs could serve as an obstacle for achieving its revised growth targets.

Post-rally blues

As the world’s leading mobile phone company for over a decade, Nokia has experienced significant spikes in its share price over the years, most notably in 2000 and again in 2007, with the former taking NOK to its all-time high of $30.12. Over the two decades that followed, however, the company’s market cap crumbled as it struggled to keep up with smartphone-focused competitors. 

In late 2025, the announcement of the Nvidia-Nokia partnership saw the NOK share price climb upward, with an AI-fuelled rally beginning in earnest as that partnership began to bear fruit in April 2026. Prices rose to the mid-teens – a level not seen since 2010 – before pulling back in June. 

Observers could be forgiven for thinking the rebound is over. Post-rally profit taking drove NOK stock down nearly 19% in the seven days to 17 July, its worst week in five years, and slipped a further 0.4% to the close on 21 July. Regardless, shares are up 55.80% in the year to date and up 114.47% in the past 12 months.  

Boosting connectivity: NOK vs ERIC vs CSCO

Observers have tended to lump Nokia in with Swedish competitor Ericsson in terms of their roles in telecoms innovation, but the two have experienced divergent fortunes in the AI era. While NOK has surged on investment in and exposure to AI-related business segments, investors seem to be punishing Ericsson after a Q2 miss on 14 July. Strength in its cloud business somewhat offset weakness in networks, but revenue still fell 6.1% y/y. The company also warned that rising costs of key components – due in part to AI-related demand squeezing supplies – will eat into Q3 profitability. 

Cisco [CSCO], in comparison, represents a more explosive AI growth story. The firm has far surpassed its internet-era market capitalisation, selling networking hardware, software and services for the AI data centre boom. Cisco is also among the names reportedly under consideration for a telecoms project developed by Nvidia, alongside Nokia, according to Needham analyst Ryan Koontz. The firm beat top- and bottom-line estimates with its Q3 2026 earnings report in May, with revenue growing 12% y/y to $15.8bn. The firm is forecasting full-year revenue of $62.8bn-63bn, with AI infrastructure solution orders expected to reach $9bn in value. 

Here is how the three stocks compare in terms of fundamentals: 

Source: Yahoo Finance

NOK stock: The investment case

The bull case for Nokia

Nokia offers a convincing recovery story for the AI age. Criticised for years for its inability to adapt to the advent of smartphones, Nokia is now adapting to the next era-shaping technology and could well pull it off. Given its size and resources, the company is able to back growth figures with equivalent R&D expenditure. Its partnerships and industry-first AI-RAN technology are sure to support innovation in the medium term, and exposure to other telecoms and networking segments could help support it even if AI-related demand flags. 

The bear case for Nokia

Though Nokia is combining sales growth with increased R&D to make its optics and AI networking revenue streams more sustainable, its projected overall growth remains much lower than pure play AI networking peers. Investors already cooling to the AI trade may need truly eyebrow-raising figures to be convinced, and the pivot still remains in early stages. With Nokia’s AI and cloud segment accounting for just 8% of total sales, even double-digit growth may not be enough to significantly offset weaker figures in other business streams, and soaring AI costs could additionally eat into sales figures in the near term. 

Conclusion

From market-leading ‘bricks’ to smartphone-era bust, Nokia seems to have learned from its past and is now embracing the deployment of AI with gusto. AI networking innovation and partnerships with firms such as Nvidia could give it a prominent place in the future of telecommunications; however, weakness in other segments and the rising cost of key components could mean it is not quite enough to impress the market with a strategic turnaround. 

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