Nokia’s AI Lab and Billion-Euro Order Surge Signal a Shift in Network Warfare

Nokia has opened a dedicated AI networking lab in Sunnyvale, California, betting the house on the data-centre boom. The so-called AI Networking Innovation Lab will test architectures for large-scale AI training, allowing cloud providers and enterprise clients to build automated solutions. Partners include AMD, Lenovo and Supermicro—a broad coalition that positions Nokia as a serious infrastructure player rather than a mere telecom equipment vendor.

The move comes as the Finnish group reports a sharp acceleration in AI-related revenue. In the first quarter, Nokia booked orders worth more than €1 billion from AI and cloud customers, pushing segment sales up 49% year-on-year. That flow of business is already reshaping the bottom line: comparable gross margin improved to 45.5%, while operating profit jumped to €281 million, comfortably beating market expectations.

Investors have taken notice. Nokia shares trade at €12.11 after gaining nearly 3% in a single session, bringing the year-to-date advance to about 117%. The stock is now trading well above its 200-day moving average of €6.17, having more than doubled since January. Much of that rally was ignited last October, when Nvidia made a multi-billion-dollar investment in the company. The two firms, together with T-Mobile, are now jointly integrating physical AI applications into modern mobile networks.

Should investors sell immediately? Or is it worth buying Nokia?

Yet the competitive landscape remains daunting. Cisco recently disclosed AI orders north of $5 billion, and Arista Networks continues to press hard in the data-centre segment Nokia is targeting. The gap to the leaders is substantial, and the Finnish group must scale its optical and IP networking divisions if it hopes to close it. Management has set a full-year 2026 operating profit target of between €2.0 billion and €2.5 billion, with network infrastructure expected to deliver double-digit growth.

A separate but telling corporate action occurred in the background: Nokia transferred nearly one million treasury shares to employees, leaving roughly 132 million own shares in its coffers. The board has authorised a dividend of up to €0.14 per share for the current year, with the first tranche already paid out in early May. The combination of share-price gains and cash returns gives shareholders a double reward, but the real test lies ahead. Nokia now must convert the strong demand for optical networking into sustainable margin expansion. If the Nvidia partnership scales as planned, it could well underpin those ambitious annual targets.

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