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Nokia (NOK) ruled the mobile phone industry during the late 90s and early 2000s. For a while, it was untouchable. But its decline came when it failed to adapt to the rapidly growing smartphone market and the intense competition from Apple (AAPL) and Samsung Electronics @samsung (SMSN.L.EB). However, fate has now taken a different turn for Nokia. Last year, Nvidia (NVDA) and Nokia announced a major strategic partnership to develop AI-powered telecom infrastructure using AI-RAN technology.
Any strategic investments from Nvidia often attract attention because investors view the chip giant as one of the best judges of future AI infrastructure winners. And, according to Nvidia’s recent 13F filing, the company still holds 166.4 million Nokia shares, now valued at $1.34 billion.
Nokia’s strong Q1 earnings report in April has already pushed the stock 110% so far this year, surpassing the broader market and even Nvidia’s 20% gain. Nvidia’s backing may help improve investor perception of Nokia, pushing the stock higher as it continues reinventing itself.
Nokia Is No Longer Just a Smartphone Story
While many investors still associate Nokia for its failed smartphone battle with Apple and Samsung, the company is making a powerful comeback. It is trying to reinvent itself around AI infrastructure and next-generation networks. Its business model has now evolved. It is now a critical supplier of AI infrastructure, optical networking, cloud connectivity, and AI-native telecom systems.
Nokia reported a solid start to 2026 with 2% increase in comparable revenue to $5.2 billion, and 67% increase in earnings-per-share to $0.06. Net sales tied to AI and cloud customers surged 49%, while Nokia received nearly $1.16 billion in new orders, primarily from optical networks. Optical networks continues to be one of Nokia’s strongest-performing businesses. Overall, network infrastructure sales grew 6%, while optical networks revenue surged 20%, mostly driven by AI and cloud customers.
The company also ended the quarter with $4.4 billion in net cash, and free cash flow balance of $731 million, which strengthened its financial position as it continued to invest aggressively in AI infrastructure opportunities.
Mobile Networks Stabilizes as Partnership with Nvidia Makes Progress
Nvidia and Nokia’s partnership revolves around developing AI-powered telecom infrastructure using AI-RAN technology. This will allow telecom operators to run AI workloads directly within wireless networks. Nvidia introduced its new 6G-ready ARC-Pro computing platform, while Nokia said it would integrate Nvidia’s AI technologies into its RAN portfolio to support future AI-native 5G-Advanced and 6G networks.
Nokia’s mobile networks segment showed signs of stabilization during the quarter. Net sales in mobile networks grew 3%, while core software sales rose 5% and radio network sales remained flat.
Management stressed that Nokia, in collaboration with Nvidia, is making progress on AI-RAN and expects begin field trials by the end of the year. Nokia believes hyperscalers will spend more than $700 billion as cloud and AI customers rapidly scale infrastructure for AI workloads. And the future adoption of agentic AI and physical AI will create an explosion in machine-to-machine communications, potentially reshaping networking requirements. Hence, the company now expects network infrastructure revenue growth of 12% to 14% in 2026, with optical and IP networks combined, potentially growing by 18% to 20%. Analysts expect Nokia’s earnings to increase by 21% in 2026, followed by 20% in 2027.
Why Nvidia’s Backing Could Matter
Nvidia’s $1.3 billion investment is financially meaningful for Nokia. But more than that, Nvidia brings AI leadership, data center expertise, AI hardware dominance, and powerful software ecosystems. Meanwhile, Nokia adds global networking expertise, telecom operator relationships, wireless infrastructure, among others. Nvidia can help Nokia become a AI-native telecom infrastructure player.
In the long run, this partnership could prove beneficial for Nokia as telecom operators begin exploring AI-native wireless infrastructure and future 6G deployments.
If AI-driven networking becomes a major long-term industry trend, Nvidia’s backing could give Nokia stronger technological relevance and greater investor confidence over the next several years.
Overall, the consensus on Nokia stock is a “Moderate Buy.” Of the 18 analysts covering the stock, 10 rate it a “Strong Buy,” two say it is a “Moderate Buy,” four rate it a “Hold,” and two recommend a “Strong Sell.” Wall Street expects Nokia stock to climb by about 10% from current levels, based on its high price estimate of $15.
