SpaceX's historic IPO, raising $75 billion and surging 19% on its Nasdaq debut, has captured the market's imagination. But for investors who prioritize fundamentals over frenzy, Nokia (NOK) presents a compelling alternative—a quieter, data-driven opportunity in the AI infrastructure buildout.
Nokia's Transformation: From Handsets to AI Networks
Nokia has long shed its image as a legacy phone maker. Today, it operates as a global communications infrastructure leader across four segments: mobile networks, network infrastructure, cloud and network services, and Nokia Technologies. The company sells equipment to carriers, hyperscalers, and data center operators in over 100 countries. In 2026, its brand licensing business is a footnote; the real story lies in optical networks, IP routing, and next-generation wireless technology.
Bank of America Securities now classifies Nokia as a key player in data center interconnect and optical transport—a shift backed by hard numbers. In Q1, Nokia reported a 49% year-over-year surge in AI and cloud net sales, alongside €1 billion in orders from AI and cloud customers. The company raised its full-year growth expectations for network infrastructure, particularly in optical and IP networks critical for AI data centers.
Nvidia Partnership: A Credibility Signal
Perhaps the most underappreciated development is Nvidia's direct equity investment in Nokia at $6.01 per share in late 2025. This strategic vote of confidence has yet to be fully priced in by the broader market. The two companies are collaborating on AI-powered radio access network technology for the 6G era, as global internet traffic is projected to quintuple from 2024 to 2034, with AI workloads driving a disproportionate share.
Nokia opened an AI Networking Innovation Lab in Sunnyvale this May, dedicated to co-developing next-generation networks for AI data centers alongside cloud and AI partners. This partnership positions Nokia at the heart of the infrastructure needed to support the exploding demand for AI compute.
Valuation: Discipline vs. Hype
SpaceX's market cap briefly touched $2.21 trillion on its first trading day—a valuation that leaves virtually no room for error, execution risk, or the ordinary turbulence faced by young public companies. History is replete with transformative firms that proved poor early IPO investments because hype outpaced fundamentals by years.
Nokia, by contrast, trades at a meaningful discount to sales, with roughly $19.22 billion in annual revenue and an $82 billion market cap. This creates an almost paradoxical setup for a business posting 49% AI sales growth and attracting Nvidia as a strategic investor. On Friday, as the market fixated on the SpaceX spectacle, NOK shares outperformed the broader technology equipment sector—a quiet reminder that durable gains often come away from the spotlight.
Why Disciplined Investors Should Look at Nokia
For investors seeking real AI infrastructure exposure without paying a once-in-a-generation premium, Nokia deserves serious consideration. Wall Street firms currently rate the stock at Overweight, and the company's momentum is grounded in tangible revenue growth and strategic partnerships. As the SpaceX IPO frenzy continues, disciplined investors may find that Nokia offers a more sustainable path to capturing the AI infrastructure theme.
This article is for informational purposes only and does not constitute financial advice.
