Nokia positioned as a 'networking juggernaut' offering connectivity and infrastructure solutions critical to AI data center buildout.

Nokia has survived more near-death experiences than almost any company in tech history. Founded 161 years ago as a Finnish wood pulp mill, the company diversified into industrial goods before shifting to electronics in the 1960s. By the early 1990s, it had refocused entirely on telecommunications, divesting rubber, cable, and consumer electronics units. The first GSM network call was performed in 1991 over Nokia's infrastructure. By the mid-2000s, Nokia had become the world's best-selling phone brand, shipping more than 250 million units annually. At its peak in 2000, the company reached a market value of around €200 billion and represented nearly 70 percent of the Finnish stock market.

The popularization of the iPhone and the subsequent smartphone transition decimated Nokia's dominance. By 2014, the company had lost 90 percent of its peak market value and sold its phone division to Microsoft. It then repositioned itself as a B2B network and telecom infrastructure provider, with base stations—also known as radio access networks (RAN)—becoming its main business.

In 2024, Nokia announced the acquisition of Infinera, which closed in February 2025, marking a major shift in the company's business model. Infinera's manufacturing expertise in photonic integrated circuits and its vertical integration addressed a critical gap for Nokia, enabling the development of digital signal processors and optical engines used for datacenter interconnects ranging from a few kilometers to thousands of kilometers.

Today, Nokia is a communications powerhouse covering both telecom and data center infrastructure. Revenue streams come from product sales and patents. The company is modernizing its product catalog and expanding into new industries including military applications and robotics. Nokia occupies a strategic position as the link between data center infrastructure and telecom networks—a role that should grow in importance as edge computing and physical AI become more relevant.

In radio access networks, Nokia ranks third worldwide by revenue, behind Huawei and Ericsson and ahead of ZTE and Samsung. The top five suppliers account for 96 percent of revenue, with Huawei and Ericsson holding nearly two-thirds. The RAN market itself has stagnated and is not expected to increase significantly before the 6G rollout begins around late 2028 or 2029.

Optical infrastructure is where Nokia is gaining ground. For the four quarters ending in Q2 2026, the top optical transport vendors were Huawei, Ciena, Nokia, and Cisco. Ciena and Nokia are the leading suppliers of disaggregated wavelength division multiplexing optical line systems, a segment that grew 80 percent year over year. The optical transport market is forecast to grow 16 percent in 2026, surpassing $18 billion for the first time since 2000, driven by AI data centers.

In IP routing, Nokia competes mainly with Cisco and Huawei. Across the broader telecom equipment market, Huawei and Cisco gained share in the first half of 2026, while Nokia's combined share fell.

As for scale and profitability, Nokia is a roughly €20 billion revenue company with around 78,000 employees. It typically runs an operating margin between 10 and 13 percent, translating to €2.0 billion of operating profit in 2025 at a 10.2 percent margin. Net sales peaked at €24.9 billion in 2022, fell to €22.3 billion in 2023 and €19.2 billion in 2024, then recovered 3 percent to €19.9 billion in 2025. Four years into the ChatGPT era, Nokia remains a smaller company than when the AI boom started, though the balance may be shifting.

Under CEO Justin Hotard, who took over in April 2025, the company has repositioned itself around AI infrastructure. The Infinera acquisition positions Nokia as a vertically integrated indium phosphide photonics player, increasing its presence across communication infrastructure based on both radio and photonics technologies.

Nokia recognizes photonics as central to its portfolio. The company already operates a photonics manufacturing site in San Jose, inherited from the Infinera acquisition, with a second fab scheduled to begin production toward the end of 2026. To increase capacity further, Nokia is expanding its advanced test and packaging operations in Pennsylvania tenfold beginning in Q3 2026 and has agreed to acquire NXP's Chandler semiconductor site in Arizona, which it will convert to indium phosphide production.

Infinera originally produced photonic integrated circuits used mainly for optical transport and networking systems over fiber optics, integrating technologies such as digital signal processors, coherent optics, and optical engines. Nokia's integration with Infinera has led to optical engines becoming one of its most important products. These are highly integrated solutions combining multiple optical functions onto a single monolithic semiconductor chip, enabling high-speed data transmission in optical communication systems. Nokia's ICE7 solution delivers 800G services over distances of up to 3,000 kilometers, essential for data center interconnect. Moreover, Nokia's products can operate at up to 1.2 terabits per second per wavelength, enabling power-efficient, high-bandwidth, low-latency data transmission. The company sells fully integrated software and hardware solutions. During Q2 2026, optical networking represented 18 percent of net sales, approximately €868 million, with the segment expanding at around 20 percent annually.

Nokia's portfolio includes a full range of IP routing solutions with presence across the entire networking ecosystem—mobile, fixed, and transport networks. The 7750 service router family, for instance, serves as a datacenter gateway and is essential for multi-ISP connections and CDN interconnection among IP networks. Traditional data centers and hyperscalers rely on the physical infrastructure Nokia provides, including critical components designed into optical and networking solutions. The FP5 networking processor is the backbone of most of their routing platforms—a fully programmable routing silicon chip whose logic can adapt to future IP needs as networking services evolve, traffic patterns shift, or security requirements change. Nokia's offerings extend beyond hardware to fully integrated systems. The 7750 Service Router ships with SR OS, the company's custom operating system for service routing. During Q2 2026, IP Networks represented 14 percent of net sales, approximately €679 million, expanding at around 16 percent annually.

Radio Networks is Nokia's base station business, which became the infrastructure leader after the company exited phones. It also covers the transport layer connecting base stations into the network. As the demand for higher speed and seamless connectivity grows in dense urban environments where billions of mobile devices require internet access, networking companies must develop solutions in the microwave physical transport layer. Nokia estimates that by 2034, traffic will be three times higher, driven by AI traffic, immersive experiences, and industrial operations. The company's answer is the Wavence portfolio, which broadens its microwave transport solutions through ultra-broadband transceivers, microwave service switches, and advanced antennas such as the UBT-m XP. During Q2 2026, Radio Networks represented 37 percent of net sales, approximately €1,765 million, growing at around 7 percent annually.

In October 2025, NVIDIA and Nokia announced a partnership to jointly develop AI-native radio access network (AI-RAN) products. The alliance expects traditional RAN networks to become software-centric, in contrast to the traditional hardware-centric approach that relies mainly on specialized chips known as ASICs to deliver telecommunications.