Nokia Shares Surge After Nvidia Announces $1 Billion Investment For Nearly 3% Stake

• Nokia said it will issue about 166 million new shares to Nvidia at a price of $6.01 each. 
• The Finnish telecom equipment maker said proceeds from Nvidia’s investment will be used to accelerate development of its 5G and 6G radio access network software.
• It stated that the goal of the strategic partnership was to become a key supplier of connectivity solutions for the “AI supercycle.”

Nvidia (NVDA) announced on Tuesday that it will make a $1 billion equity investment in Nokia (NOK), acquiring a 2.9% stake in the Finnish telecom equipment maker.

NOK’s stock jumped nearly 18% after the news and was among the top trending tickers on Stocktwits. Retail sentiment around the shares surged within the ‘extremely bullish’ zone, accompanied by chatter at ‘extremely high’ levels.

Meanwhile, NVDA’s stock rose 1.1% and was also among the top trending tickers on Stocktwits. CEO Jensen Huang also delivered a keynote speech at the company’s annual GTC conference, where he announced that the company would be partnering with the Department of Energy to build seven new AI supercomputers.

Nokia said it will issue about 166 million new shares to Nvidia at a price of $6.01 each. These shares will be delivered in the form of American Depositary Shares and are expected to be listed on Nasdaq Helsinki, Euronext Paris, and the New York Stock Exchange once registered.

Nokia’s AI Networking Push

Nokia said proceeds from Nvidia’s investment will be used to accelerate development of its 5G and 6G radio access network (RAN) software and strengthen its position in AI and cloud infrastructure. The company plans to allocate part of the capital to broader corporate initiatives aligned with its goal of becoming a key supplier of connectivity solutions for the “AI supercycle.”

As part of the agreement, Nokia and Nvidia will collaborate on AI networking technologies and explore ways to integrate Nokia’s data center switching and optical networking systems into Nvidia’s expanding AI infrastructure. 

Nokia, traditionally known for selling mobile network parts, has been pushing into data centers. In the third quarter (Q3), the company attributed a lot of its growth to revenue coming from AI, cloud, and data center clients. The key growth drivers helped the company beat earnings expectations and lift guidance.

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