Not Intel. Not CoreWeave. This Underappreciated Nvidia-Backed Company Is Growing Artificial Intelligence (AI) Revenue by 123%. Here's Why It's a Buy Today for $8.
2026-10-23 14:30
•Adam Spatacco •The Motley Fool
•••••• ••••••••• Axe Cap view
Nokia’s AI Drive: A Quiet Underdog Worth Watching
Nokia’s AI & Cloud unit is growing over 120% yearly, backed by Nvidia’s $1 billion bet, pointing to a promising AI infrastructure role.
Nokia doesn’t grab headlines like Nvidia or Google, but its AI & Cloud segment’s 123% annual revenue growth signals a major transformation. The company’s partnership with Nvidia, focused on AI radio access networks, puts Nokia at the heart of next-generation telecom infrastructure. This matters for South Africa because improved network tech lowers costs and boosts capacity for local firms and consumers. For the JSE, MTN indirectly benefits, but Nokia itself isn’t listed locally, so USD/ZAR is a better lens: a weaker rand raises the cost of such advanced imports but also boosts the profitability of local exporters like MTN and Naspers. Nokia trades cheaply at a 2.6 price-to-sales ratio, a value rarely seen in fast-growing tech names. The main risk is that hyperscalers slow capex, stalling demand for Nokia’s gear. But if AI-fuelled data centre expansion continues, Nokia can surprise investors. this is just our opinion and not financial advice
Watch Nokia shares for a potential entry on dips; in South Africa, favour MTN as AI infrastructure rollout supports telecom growth, while keeping an eye on USD/ZAR for import cost pressures.
- Nokia (NOK)
- MTN
- USD/ZAR
- Hyperscaler capex slowdown
- Rand weakening increasing import costs
- Execution risk in Nokia's AI strategy
6/10
Nokia is undergoing an AI-driven transformation as a supplier of AI networking equipment and infrastructure. Nvidia invested $1 billion in Nokia last year to collaborate on AI radio access networks (AI-RAN). Nokia's AI & Cloud division revenue surged 123% year-over-year to 631 million euros in Q3, with order intake up 118%. The company is positioned as a key pick-and-shovel supplier in the AI infrastructure ecosystem, providing optical networking equipment needed by hyperscalers building data centers.
Our take is based on reporting first published by The Motley Fool.