ESPOO, Finland — Nokia Oyj shares skyrocketed nearly 9% Monday in Helsinki trading to €8.74 as investors piled into the Finnish telecom equipment maker ahead of its first-quarter earnings, following a bullish upgrade from Bank of America that highlighted strong growth potential in optical networks fueled by exploding AI data traffic and hyperscaler spending.

Nokia CEO Pekka Lundmark says he was "particularly pleased by strong sales growth" as the Finnish telecoms giant returned to profit.
Nokia Lehtikuva / Heikki Saukkomaa

The surge marked one of Nokia's strongest single-day gains in recent months and pushed the stock to levels not consistently seen since 2011, continuing a remarkable recovery that has seen shares more than double from lows in 2025. Trading volume spiked as optimism spread that Nokia is well-positioned to capitalize on the infrastructure demands of artificial intelligence, 5G-Advanced and eventual 6G deployments.

Bank of America upgraded Nokia to a Buy rating from Neutral, citing accelerating demand for high-capacity optical and IP networking gear as cloud providers and telecom operators build out AI-ready infrastructure. The firm raised its price target significantly, reflecting confidence that Nokia's technology portfolio — particularly in optical transport and routing — can capture a larger share of the multi-billion-dollar wave of spending driven by generative AI workloads.

Nokia has aggressively positioned itself in the AI infrastructure narrative. Its solutions for high-speed, low-latency optical networks are increasingly critical for moving massive datasets between data centers and supporting the training and inference of large language models. Executives have emphasized "AI-native" networks that integrate intelligence directly into the infrastructure, a theme that resonated with investors after recent demonstrations at industry events including Mobile World Congress.

The upgrade comes at a pivotal moment. Nokia's first-quarter 2026 interim report is scheduled for release on April 23, with analysts expecting updates on order intake, margin trends and progress in its restructured business segments. The company shifted to a new reporting structure at the start of 2026, providing more granular visibility into areas such as Network Infrastructure, which includes optical and IP routing — segments now seen as primary growth engines amid AI tailwinds.

Nokia has faced challenges in recent years, including intense competition from Ericsson and Huawei, margin pressure in mobile networks and a multi-year cost-cutting program that included significant job reductions. The company has been trimming its global workforce, aiming to reduce annual costs substantially while refocusing on higher-margin software, enterprise and optical businesses.

Despite those headwinds, recent momentum has been building. Nokia secured key 5G contracts, including a multi-year deal with Virgin Media O2 in the U.K. for AirScale radio access network equipment featuring Massive MIMO and AI-enabled capabilities. Partnerships and product launches in private wireless, enterprise solutions and defense-related technologies have also broadened its revenue base.

The stock's rally reflects a broader re-rating of telecom equipment suppliers as AI spending shifts from pure hyperscaler GPU clusters to the underlying networking fabric that connects them. Optical networking, in particular, has become a hot area as data center interconnect demands soar. Nokia's technology in coherent optics and high-capacity routing positions it to benefit alongside peers, though analysts note execution and competitive dynamics will determine market share gains.

Chief Executive Justin Hotard, who took the helm in 2025, has emphasized operational discipline, innovation in AI-driven networks and selective growth in attractive segments. The company continues to invest in research and development through Nokia Bell Labs, with recent emphasis on AI integration across its portfolio.

Monday's sharp move also coincided with generally positive sentiment in European tech stocks and easing geopolitical concerns that had weighed on risk assets earlier in the month. Nokia's dual listing in Helsinki and as an American Depositary Receipt on the New York Stock Exchange (NOK) saw sympathetic buying interest in U.S. trading hours.

Valuation metrics have expanded with the rally. While still viewed as reasonable by some compared with historical averages, the stock trades at a premium to recent troughs, prompting debate over whether the current enthusiasm is sustainable or risks a pullback if upcoming earnings disappoint. Analysts' consensus price targets have risen but remain mixed, with some calling for further upside while others caution about near-term margin visibility.

Nokia's dividend policy remains shareholder-friendly. The board has proposed flexible distributions up to €0.14 per share in installments rather than a single payout, providing flexibility amid ongoing restructuring. The Annual General Meeting held earlier in April approved board changes, including the planned succession of Board Chair Sari Baldauf by Timo Ihamuotila.

Longer-term opportunities include the transition toward 6G, where Nokia aims to play a leading role through standards development and early technology trials. The company's strong patent portfolio in wireless technologies continues to generate licensing revenue, offering a relatively stable income stream.

Challenges persist. Mobile networks margins have been under pressure, and large-scale 5G deployments in some markets have slowed. Geopolitical tensions, supply chain issues and currency fluctuations also affect results, given Nokia's global footprint.

For investors, Nokia represents a play on both traditional telecom infrastructure renewal and the newer AI networking boom. The stock's volatility reflects shifting narratives — from a legacy handset maker to a diversified networking and technology leader — with AI providing fresh optimism after years of stagnation.

As the April 23 earnings approach, focus will center on order backlog trends, particularly in optical and enterprise segments, cost-saving progress and any updated full-year guidance. Positive surprises on AI-related demand could fuel further gains, while any softness in core mobile infrastructure might temper enthusiasm.

Monday's 8.74% jump underscored how quickly sentiment can shift in the sector when analyst upgrades align with macro tailwinds and thematic interest in AI infrastructure. Nokia, once considered a fading giant, is once again drawing attention as a potential beneficiary of the massive capital expenditure cycle unfolding in data centers and carrier networks worldwide.

Whether this momentum sustains through earnings season will depend on concrete evidence that the optical and AI narratives are translating into revenue acceleration and margin expansion. For now, investors appear willing to give Nokia the benefit of the doubt as it navigates its transformation in an increasingly AI-driven telecom landscape.