Nokia and Nvidia Team Up: Is the Telecom Giant Finally Ready to Make a Major Move?

The Deal That Changed Everything

When Nokia announced its strategic partnership with Nvidia on October 28, it sent shockwaves through the market. The stock price jumped immediately, though it has since cooled off. But here’s what’s interesting: beneath the surface, something fundamental may be shifting for a company that’s been struggling to find its footing for nearly two decades.

The agreement focuses on integrating Nokia’s 5G and next-generation 6G solutions with Nvidia’s technology infrastructure. The goal is simple but ambitious—develop AI-ready networking that can power the next wave of mobile networks designed from the ground up to work with AI systems. Think of it as building the digital highways that AI applications will need to operate at scale.

For Nokia, this partnership represents validation from one of the world’s most important tech companies. It’s not just another vendor agreement; it’s Nvidia essentially betting that Nokia’s telecom infrastructure will be critical to AI’s future.

What the Numbers Are Telling Us

The financial picture is mixed, but there are signs the tide is turning. In the first nine months of 2025, Nokia generated 13.7 billion euros ($16.0 billion) in revenue—a modest 4% increase year-over-year. That sounds underwhelming until you look closer: Q3 revenue jumped 12% compared to the same quarter last year, driven specifically by growth in AI and cloud-related optical networking business.

The profit side tells a more complicated story. Net income for the first three quarters of 2025 fell to 116 million euros ($136 million), down sharply from 471 million euros in 2024. However, Q3 captured 80 million euros of that total, suggesting momentum is building again. The P/E ratio sits at 36—higher than the S&P 500 average of 31—but the forward P/E of 21 suggests the market expects profits to recover meaningfully.

Year-to-date, Nokia shares are up nearly 42%, indicating investors are already positioning themselves for a potential turnaround.

Why 2026 Could Be Different

Here’s the critical timing factor: while the Nvidia partnership addresses current 5G deployments immediately, the real fireworks won’t come until later. The 6G specification isn’t expected to be finalized until late 2028, meaning there’s roughly a two-year runway before major revenue impacts materialize from that side of the business.

But that doesn’t mean nothing will happen. The 5G integration with Nvidia’s AI infrastructure is happening now. Edge computing capabilities, cloud optimization, and AI-native network support are all in play. These improvements could drive incremental revenue growth in telecommunications infrastructure starting as soon as 2026.

More importantly, the partnership signals that Nokia has become strategically relevant again in the AI era. After years of being treated as a legacy telecom player, the company now has a seat at the table where the future is being built.

The Real Question

The stock has already moved up 42% this year, so much of the optimism is priced in. The October announcement itself triggered a “sell the news” reaction, suggesting some investors have taken early profits. This is actually healthy—it means the real opportunity may be for investors who buy on weakness as the company continues proving it can execute on this partnership.

Nokia still faces execution risk. Converting this partnership into sustained revenue growth requires flawless technical integration and market adoption. But for the first time in years, the company has something that Nvidia wants—and in the AI-driven tech landscape, that kind of strategic alignment matters tremendously.

Whether Nokia truly breaks out depends on how effectively it can translate this partnership into concrete business results over the next 18 months.