Nokia Strikes $1 Billion Nvidia Deal While Trimming Hardware Exposure

Nokia is simultaneously placing a blockbuster bet on artificial intelligence and shedding a legacy hardware business, a two-pronged move that has propelled the stock to a fresh 52-week high of €11.74. The Finnish network equipment maker has secured a $1 billion investment from Nvidia, announced a 5G defense partnership with Lockheed Martin, and raised its revenue guidance for fiscal 2026 — all while agreeing to sell its fixed wireless access (FWA) customer premises equipment unit to Inseego for around $20 million in stock and warrants.

The divergence in scale between the two transactions underscores Nokia’s strategic pivot. The Nvidia deal and the Lockheed Martin tie-up signal a determined shift toward autonomous AI and military-grade networking. The Inseego divestiture, by contrast, clears out a business that generated roughly $200 million in annualized revenue but no longer fits the core direction. Nokia will retain an approximately 11% stake in Inseego after the deal closes in the fourth quarter of 2026.

The market has rewarded the realignment generously. On Wednesday, Nokia shares stood at €11.54, up 2.9% on the day, and have more than doubled year to date with a 111% gain. The stock now trades at levels not seen in more than a year, fueled by the twin catalysts of AI adoption and defense diversification.

AI-Driven Network Overhaul

Nvidia’s capital injection is tied to Nokia’s aggressive push to embed autonomous AI agents into its fixed-network platforms, including Altiplano, Corteca, and Broadband Easy. Drawing on experience from over 600 million broadband lines deployed globally, Nokia is rolling out agentic AI functions that can autonomously analyze faults using natural language processing and computer vision.

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

The software is already being tested live by a large operator in the Asia-Pacific region, with a broad commercial rollout scheduled for the second half of 2026. Nokia has set ambitious operational targets: first-contact resolution rates above 50% in helpdesks, network incident qualification within 5 minutes, and a halving of on-site technician visits — as well as a 50% reduction in return visits for installations and connected households.

The system also creates digital twins of fiber connections and uses computer vision to verify installation quality. Automatic diagnostics aim to detect network degradation before it causes outages. Industry research firm Omdia projects that the broader market for agentic AI in telecoms will reach $6.2 billion by 2030, with 48% of communications providers already seeing the most immediate benefit in customer experience — though network management is viewed as the long-term priority.

New Leadership for the Next Phase

To steer the transformation, Nokia is strengthening its management team. Emma Falck will take over the mobile network infrastructure division on September 1, 2026, moving from Siemens to embed artificial intelligence more deeply into the development of mobile networks. The appointment reinforces Nokia’s ambition to evolve from a pure telecom equipment supplier into a partner for AI and defense.

On the defense front, the partnership with Lockheed Martin will focus on 5G-based battlefield communications and resilient network architectures, tapping into rising defense budgets across NATO markets.

Analysts Upgrade as Portfolio Reshapes

The strategic moves have drawn favorable analyst attention. Argus upgraded Nokia from Hold to Buy with a $15 price target, citing stronger AI demand and higher revenue growth expectations for the Network Infrastructure segment in 2026. Morgan Stanley raised its target from €8.50 to €11 while maintaining an Overweight rating.

Nokia at a turning point? This analysis reveals what investors need to know now.

The Inseego exit may be modest in financial terms — Nokia’s FWA unit was part of a broader “Portfolio Businesses” segment that generated around €850 million in revenue last year with an operating loss of €90 million — but it frees up capital and management bandwidth. Nokia’s corporate development chief, Konstanty Owczarek, called Inseego the “right strategic partner” for the business, signaling that continuity for customers mattered more than retaining a non-core asset.

The big test now comes in the second half of 2026, when Nokia’s broader AI software rollout must prove its commercial viability. The stock has already priced in considerable optimism; a more durable revaluation will depend on whether the AI products translate into tangible order growth, margin expansion, and acceleration in network infrastructure revenues.

Ad

Nokia Stock: New Analysis - 13 May

Fresh Nokia information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.

Read our updated Nokia analysis...

en | FI0009000681 | NOKIA | boerse | 69324085 |