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The old Nokia is dead. We all know that story. It was a giant. It owned the mobile world. Then came the iPhone. The fall was swift and brutal. Nokia sold its handset business. The company seemed destined for the dustbin of history.

Nokia Phone
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But a ghost of a giant does not just vanish. It changes form. Today, Nokia is not about consumer phones. It is about the pipes. It is about the network that powers the digital world. Data centers, wireless solutions—this is the new battlefield. And the new fight is for Artificial Intelligence.

The Dark Days of 2024

Last year was terrible. A quick look at the books tells the tale. Revenue dropped 9% year-over-year. The total sales figure was $19.2$ billion euros. Management had to admit they were struggling. The network business faced strong headwinds. Investors were nervous. Nokia stock was flat, stuck in the mud. The fear was simple: Had the company failed to adapt again?

The stock needed a spark. It needed a complete overhaul, a shock to the system. Change arrived early in 2025. A new CEO took the helm. Justin Hotard was put in charge. His mandate was clear: steer the ship towards AI. This was the pivot. The decision was risky. The industry moves fast. But Hotard saw the future. He saw AI traffic overwhelming existing 5G networks. He saw opportunity.

The $1 Billion AI Bet from Nvidia

The real shock came in October 2025. The announcement was huge. Nvidia stepped onto the stage. Nvidia, the chip titan of the AI boom, partnered with Nokia. This was not a small handshake deal. It was a massive commitment. Nvidia agreed to invest $1$ billion into Nokia. They bought shares at $6.01$ per share. This was a clear vote of confidence in Nokia's future. Wall Street took notice. The stock immediately surged more than $40\%$ in 2025 alone, through mid-December.

Why the huge investment? The technology is the answer.

AI-RAN: The Engine for 6G Growth

Nvidia and Nokia are not building old systems. They are building the future. They are creating AI-RAN. This stands for Artificial Intelligence Radio Access Network. Current 5G networks are passive. They simply move data. AI-RAN is different. It uses AI to manage traffic intelligently. It improves speed. It boosts coverage. It maximizes capacity.

Think about the sheer demand. ChatGPT has hundreds of millions of users. Half of them access the service on mobile devices. Self-driving cars need real-time data. Drones and advanced robots require instant connectivity. Wireless traffic is expected to skyrocket. Existing infrastructure cannot handle it. This is why Nokia's AI-RAN, a crucial step toward 6G, is a potential goldmine.

Testing the Future in 2026

The rollout is not just a distant dream. It is happening now. T-Mobile US, a major telecom player, will begin testing Nokia's AI-RAN systems in 2026. This is a massive proof point. It is real-world validation. If the tests succeed, deployment will accelerate. Nokia will have a significant edge in the new networking era. CEO Hotard calls this putting an "AI data center into everyone's pocket". That vision is powerful.

The numbers are starting to reflect the turnaround. The first three quarters of 2025 showed revenue growth. Third quarter revenue jumped $12\%$ year-over-year to $4.8$ billion euros. This is a strong rebound from the 2024 decline. However, the path is not perfectly smooth. Operating profit did fall in Q3 due to increased costs. Nokia must reduce expenses. They are targeting $1.2$ billion euros in cost savings by the end of 2026. This discipline is critical.

So, is Nokia a must-own stock for 2026? The company is a turnaround story, not a safe bet. It faces tough competition from Ericsson and Cisco Systems. But the momentum is undeniable. Wall Street analysts forecast $25\%$ earnings growth for 2026. Some even suggest the stock could reach $10$ per share, a price not seen in a long time. The key lies in the AI pivot. If Nokia executes its AI-RAN strategy, backed by Nvidia's money and technology, the stock is poised for dramatic gains. It is no longer the old, dying phone company. It is a new engine for the AI age. The question is no longer if Nokia is relevant. The question is how high it can fly.

Source: https://www.fool.com/investing/2025/12/19/is-nokia-a-must-own-stock-for-2026/



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