Nokia Rises from Ashes Thanks to Data Center and AI Boom

Once a dominant force in mobile phones, Nokia is experiencing a remarkable comeback, fueled by the explosive growth of data centers and artificial intelligence. The Finnish technology giant has seen its stock value soar, reclaiming its position as Finland's most valuable publicly traded company after a 15-year hiatus.

Nokia's shares have appreciated by an impressive 124% year-to-date and 163% over the past twelve months. This surge reflects strong investor confidence in the company's renewed strategy, which prioritizes its network infrastructure division. Nokia aims to become a leading global supplier of fiber optics, IP networks, and routers, critical components for the burgeoning fields of data centers, cloud computing, and AI.

The company's AI Cloud business, which supports AI and cloud services, saw its revenue increase by 49% year-on-year in the first quarter, reaching 350 million euros. This segment now accounts for 8% of Nokia's total sales, double its contribution from the previous year. Furthermore, Nokia secured orders worth 1 billion euros in this sector.

Nokia's CEO, Justin Hotard, noted a significant acceleration in global demand for these services, prompting the company to raise its annual market growth forecast to 27%, up from a previous estimate of 16%. This strategic pivot away from a sole focus on 5G mobile networks towards fixed networks, bolstered by the February 2025 acquisition of U.S. fiber optics specialist Infinera for approximately 2 billion euros, has solidified Nokia's market position.

This acquisition has positioned Nokia as the world's second-largest provider of fiber optic networks, trailing only China's Huawei. The move also expanded Nokia's client base beyond traditional telecom operators to include tech giants like Google and Microsoft, who are heavily investing in AI development and data center construction worldwide. A strategic partnership with Nvidia in October 2025 further boosted investor interest, with the chipmaker investing $1 billion for a 2.9% stake in Nokia and forming an alliance to co-lead the transition to AI-native radio access networks (AI-RAN) and sixth-generation mobile technology.