Nokia’s AI and Defense Infrastructure Pivot Sends Shares Soaring
Nokia has long since retreated from the mainstream consumer handset market, shifting its focus to telecommunications network equipment and, more recently, expanding into AI data centers, cloud networking and defense communications. The transformation has taken the company beyond its traditional role as a base-station supplier and into the high-speed connectivity infrastructure needed by companies such as NVIDIA and Alphabet to expand computing capacity. It has also reduced Nokia’s reliance on capital spending by telecom operators.
On October 28, 2025, NVIDIA announced a $1 billion investment in Nokia at $6.01 per share, acquiring about 166 million shares. The companies will jointly develop AI-RAN and data-center networking solutions, while Nokia continues to deepen its partnership with Alphabet’s Google Cloud. Strong revenue growth in AI and cloud businesses, coupled with rising demand for defense communications, has pushed Nokia shares up nearly 90% year to date.
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The history behind this eventNokia Pivots to AI Optical Networks as NVIDIA Stake Fuels Rally
Nokia, once synonymous with mobile phones, has spent years rebuilding itself as a telecom equipment supplier and is now targeting the optical links and switches that move data through AI data centers. Its $2.3 billion acquisition of Infinera, completed in 2025, expanded its North American reach and strengthened its photonics portfolio. The shift matters because training and running AI models require vast amounts of data to travel rapidly between servers, turning optical networking into a critical constraint on new computing capacity.
On April 23, 2026, Nokia said first-quarter Optical Networks sales rose 20% year on year, while revenue from AI and cloud customers jumped 49%; related orders totaled €1 billion. It raised its 2026 growth assumption for Optical and IP Networks to 18%-20% from 10%-12%. Omdia estimates Nokia's North American optical share surged to 27.3% in 2025 from 6.3% in 2024, ranking second behind Ciena. The shares gained nearly 90% in 2026 after NVIDIA announced a $1 billion investment for a 2.9% stake on October 28, 2025.
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