Nokia ( (NOK) ) has risen by 9.16%. Read on to learn why.
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Nokia’s stock has experienced a notable 9.16% increase over the past week, largely due to a strategic $1 billion investment from Nvidia. This partnership sees Nvidia acquiring a 2.9% stake in Nokia, with a focus on developing AI-native mobile networks. This collaboration is part of Nokia’s broader strategy to pivot towards AI and cloud services, positioning itself as a key player in the global AI infrastructure landscape.
The investment from Nvidia, a leader in AI chip technology, is seen as a significant endorsement of Nokia’s strategic direction. The partnership aims to leverage Nokia’s networking strengths to develop AI-powered Radio Access Networks (RAN) and enhance data center networking capabilities. This move is expected to create substantial value for both companies, as they work together to advance the AI-RAN market and prepare for the rollout of 6G technology.
Despite the positive momentum, Nokia faces challenges in its legacy operations, which continue to impact its overall profitability. The company’s Mobile Networks segment has seen a decline in operating margins, and there are concerns about the high valuation of Nokia’s stock. While the strategic partnership with Nvidia is a promising development, investors are advised to consider the potential risks and the need for Nokia to balance its legacy business challenges with its new growth initiatives.