Nokia Is Betting Big on AI Infrastructure in Asia — Here's Why the Market Still Isn't Convinced

Nokia's role is to provide the optical networking, IP routing, and 5G RAN infrastructure that connects the AI fabric . Separately, Nokia and Indosat signed a nationwide commercial contract to deploy AI-RAN architecture, with field trials by the end of 2026 and broad deployment expected in 2027 . Nokia is rolling out low- and mid-band 5G across Indosat's entire network, enabling AI inference at the network edge in collaboration with NVIDIA .

Taiwan Mobile: An AI-native 5G proving ground

In July 2026, Nokia signed a 5G expansion agreement with Taiwan Mobile — its largest and most technically ambitious upgrade since 2020 . The deal embeds AI inference directly into the radio access network (RAN) via Nokia's AirScale portfolio and four distinct AI applications: network intelligence, energy management, automation, and resilience .

What started as a March 2025 memorandum of understanding has moved to network-wide commercial rollout . Rather than simply adding hardware capacity, Nokia is deploying AI-driven software that lets the network tune, heal, and power itself automatically . Taiwan is effectively becoming a proving ground for AI-native mobile infrastructure .

The bull case: Surging orders, insider buying, and analyst upgrades

The headline numbers are striking. Nokia's AI and cloud orders jumped from €1 billion in Q1 2026 to €2.8 billion in Q2 2026, with the AI & Cloud segment more than doubling sales year-over-year . The Wall Street Journal noted that Nokia has pivoted from phones to supplying "crucial infrastructure inside data centers that support the AI boom" .

Insiders have been buying shares. CEO Justin Hotard, Chief Development Officer Konstanty Owczarek, and senior managers like Victoria Hanrahan and Kristen Pressner have all made open-market purchases this year . On July 24 alone, three insiders bought a combined 165,293 securities . BofA lifted its Nokia price target to $18.50 and kept a Buy rating, while JPMorgan reiterated an Overweight rating and an €18.00 price target . SEB Equities upgraded Nokia to Buy with a €12 target .

The bear case: Why skepticism persists

Despite those signals, several concrete concerns keep many investors cautious.

• Free cash flow remains negative. In Q2 2026, AI and cloud orders reached 6.3 times Nokia's quarterly revenue, yet free cash flow was still negative, raising questions about how the order book will be funded and how profitable it will ultimately be .

• The legacy telecom business is weakening. Investors are weighing Nokia's AI ambitions against slowing legacy operations, execution risks, and a lack of meaningful near-term earnings acceleration . The stock fell roughly 7% after the AI-RAN launch and Q2 earnings, as the market focused on near-term margin pressure rather than order volume .

• The stock has already rallied 440% in a year. After such a dramatic run — the stock hit a 16-year high — many institutional investors are skeptical that the AI story can deliver consistent earnings growth fast enough to justify the valuation . Analysts at BofA and JPMorgan explicitly noted their Buy ratings lean on the AI order book "despite only modest near-term guidance" .

• Insider buying is small relative to market cap. While the insider purchases are directionally bullish, the absolute amounts — tens of thousands of shares, not millions — are modest for a company with a multi-billion-euro market cap .

The core tension

Nokia is winning big AI infrastructure contracts in Asia that position it well for the medium term. The Zankore platform and Taiwan Mobile deal are real, multi-year commitments from major partners. The order pipeline is growing fast. But the market wants to see that order flow convert into positive free cash flow and meaningful EPS growth before fully pricing in the transformation.

For now, Nokia remains a story of two halves: a company executing a credible AI pivot on the ground, but still trading on promises rather than profits.