Last year, Nvidia announced a $1B investment in Nokia.
That was the moment I stopped thinking of Nokia as the old mobile company and started digging into what it had actually become. The more I read, the more surprised I was.
The business today has almost nothing to do with the Nokia people remember. It's increasingly becoming a networking and AI infrastructure company. While everyone is arguing over GPUs, Nokia is selling the optical transport, IP networking and data-center infrastructure needed to connect AI clusters. AI and cloud customers have become one of its fastest-growing businesses, and management has actually raised its AI infrastructure growth outlook after demand came in stronger than expected.
Another thing that gives me conviction is that Nokia isn't just trying to win today's networking cycle. Through Bell Labs it's leading Europe's flagship Hexa-X and Hexa-X-II 6G research programs, helping shape the standards for the next generation of wireless networks. Commercial 6G is still years away, so I don't view it as a near-term catalyst, but I'd rather own a company that's helping define the technology than one waiting for the standards to be written. At the same time, Nokia has been working with NVIDIA on AI-RAN and AI-native networks, which is essentially the bridge between today's AI infrastructure buildout and tomorrow's 6G networks.
The market still seems to think of Nokia as a sleepy telecom company that's permanently stuck in the 5G cycle. Meanwhile, its optical networking business has been gaining momentum, it has booked significant AI and cloud networking orders, and the Infinera acquisition makes it an even bigger player in AI networking.
Could I be wrong? Absolutely.
If hyperscaler AI spending slows, telecom capex stays weak, or AI networking turns out to be less profitable than expected, I'll look like the guy who made Nokia 20% of his portfolio.
But that's my bet on holding 125 NOK shares.
Everyone is chasing the companies building the AI models. I'm betting there's still money to be made selling the pipes those models have to run through.