Nokia Stock May Be the Most Attractively Priced Way to Bet on AI Infrastructure

Nokia Corporation (NOK) is a global telecommunications and network infrastructure leader and one of the most dramatic corporate reinventions in the history of technology. Under CEO Justin Hotard, Nokia has pivoted decisively from its legacy as a mobile phone manufacturer into an AI-era optical networking, IP routing, and 5G infrastructure powerhouse.

In October, Nokia secured a landmark $1 billion equity investment from Nvidia (NVDA) to accelerate AI integration into 5G radio access networks and broader network infrastructure, including AI-RAN and AI Grid solutions aimed at future 6G readiness, while the acquisition of Infinera has deepened its optical leadership. With AI and Cloud customer sales growing 49% year-over-year (YoY), a next-generation photonic chip roadmap targeting a tenfold increase in output, and an agentic AI framework embedded within its Network Services Platform, Nokia is quietly becoming one of the most compelling AI infrastructure plays in the telecom equipment sector.

Nokia Stock's Yearly Surge

Nokia has delivered a staggering 166% total return over the past 12 months, with the stock hitting a 52-week high of $17.45, its highest level since 2010, against a 52-week low of just $4.00, reflecting a near 340% move from trough to peak driven entirely by AI infrastructure momentum and the Nvidia partnership. Despite a recent 11% pullback over the past month and a 7% weekly decline, the stock's longer-term trajectory remains firmly bullish.

Against the S&P 500's ($SPX) approximately 23% 12-month return, NOK's 166% gain dramatically outpaces the broader market, cementing its status as one of the most extraordinary AI infrastructure re-rating stories in the large-cap telecommunications sector.

Nokia Results Beat Estimates

Nokia reported Q1 2026 EPS of $0.0586, beating the analyst consensus of $0.0446 by an impressive 31.39%, while revenue of $5.27 billion slightly missed the $5.32 billion forecast, a combination that sent shares surging 12.08% in premarket trading on earnings day. AI and Cloud customer net sales surged 49% YoY, reaching 8% of total group revenue and generating over €1 billion in new orders in the quarter, underscoring the accelerating demand from hyperscalers and cloud providers for Nokia's optical and IP networking solutions.

Comparable operating profit surged 54% to €281 million, beating the €250 million analyst consensus, while gross margin expanded 320 basis points to 45.5%, operating margin improved 200 basis points to 6.2%, and free cash flow reached €629 million, with net cash on hand growing 27% YoY to €3.788 billion. Optical Networks' net sales grew 20%, benefiting from Infinera synergies and hyperscaler demand, while Nokia raised its 2026 growth guidance for Network Infrastructure to 12–14% from 6–8% and for Optical and IP Networks combined to 18–20% from 10–12%.

Nokia's full-year 2026 guidance remains unchanged, targeting €2.0–2.5 billion in comparable operating profit, with the company currently tracking moderately above the midpoint of that range. CEO Justin Hotard stated: "We delivered a solid start to the year, with net sales growing 4%, gross margin expanding 320 basis points, and operating margin expanding 200 basis points in the first quarter. Demand continued to be strong, particularly in AI and Cloud, where net sales grew 49% and now account for 8% of group sales."

Management also modelled the AI and Cloud addressable market at a 27% CAGR for 2025–2028, up from its prior 16% estimate, with hyperscaler capital expenditure expectations rising to over $700 billion in 2026, validating Nokia's strategic pivot toward optical and IP networking for the AI era as a durable, multi-year structural growth opportunity.

Nokia Extends Google Cloud Deal

Nokia shares surged over 7% after announcing an expanded partnership with Google (GOOG) (GOOGL) Cloud to integrate Gemini AI models into Nokia's Assurance Center network management platform. The collaboration introduces six specialized AI agents, including Router, Event Triage, KPI Selector, Anomaly Reasoner, and Dashboard agents, capable of managing network tasks independently or collaborating to resolve complex operational problems. The platform will launch as a SaaS offering on the Google Cloud Marketplace in September 2026, with operators able to deploy an initial certified agent pack immediately.

Google Cloud highlighted that the agents could reduce network problem-solving times by 50–80% and enable fully automated, self-driving network operations, eliminating expensive custom software overlays. Nokia developed the agents using Google Cloud's Agent Development Kit on the Gemini Enterprise Agent Platform, with additional capabilities rolling out across Nokia's broader network portfolio through 2027, a meaningful step toward AI-native telecommunications infrastructure at scale.

Should You Get NOK Stock?

With Google Cloud's Gemini AI agent integration marking Nokia's most significant enterprise software partnership to date, and a 7% single-day surge validating investor enthusiasm, Nokia's AI-native network transformation is accelerating meaningfully. Wall Street's consensus stands at "Moderate Buy" across 18 analyst ratings, comprising 10 "Strong Buy," two "Moderate Buy," four "Hold," and two "Strong Sell," with a mean price target of $15.81, implying approximately 15% upside from current levels.

For investors seeking affordable exposure to the AI networking infrastructure buildout, NOK offers a rare combination of a compelling valuation, Nvidia backing, and a Google Cloud partnership, making it one of the most attractively priced AI infrastructure plays in the market today.