In a strategic vote of confidence, Nvidia acquired a 5% equity stake in Nokia, underscoring accelerated co-development of AI-native radio access network solutions. The collaboration, announced in late January, targets integration of Nvidia’s GPU-accelerated computing with Nokia’s AirScale RAN portfolio. Executives project that AI-RAN deployments could represent up to €2.5 billion in annual revenue by 2028, as hyperscale cloud and telecom operators seek to optimize capacity and energy efficiency.

Nokia reported fourth-quarter net sales of €6.1 billion, a 2% year-on-year increase that topped the analyst consensus of €6.95 billion (adjusted for currency and portfolio effects). Optical Networks surged 17% Y/Y to €981 million, while Network Infrastructure grew 7% Y/Y overall. Comparable gross margin expanded 90 basis points to 48.1%, though comparable EPS converted to dollars came in at $0.19 versus the $0.17 estimate. Management cited higher R&D investments in Network Infrastructure for a 90 basis point contraction in operating margin to 17.3%.

At quarter end, Nokia held €3.4 billion in net cash and generated €200 million of free cash flow despite elevated CAPEX in advanced connectivity projects. The board approved a €0.03 per share dividend for February payment. Looking ahead to FY26, Nokia forecasts free cash flow of approximately €1.46 billion at the midpoint, even as CAPEX rises by 15% to support 6G and defense program launches. Network Infrastructure net sales are targeted to grow at the 6%–8% long-term CAGR, with combined IP and Optical Networks set to expand 10%–12%, reinforcing the case for continued undervaluation relative to peers.