This article first appeared on GuruFocus.
Nokia (NYSE:NOK) shares surged nearly 20% Tuesday after chip giant Nvidia (NASDAQ:NVDA) announced a $1 billion investment in the telecom equipment maker, a move aimed at combining their strengths to power the next generation of AI-driven networking.
The deal marks a major step for both companies. Nvidia is taking a 2.9% stake in Nokia by purchasing about 166 million new shares at $6.01 each, while Nokia plans to use the funds to accelerate development of its 5G and 6G software to run on Nvidia’s architecture. The collaboration will also help Nokia expand its footprint in cloud and AI infrastructure.
Beyond the investment, the two will co-develop AI networking solutions and explore integrating Nokia’s optical and data center switching technologies into Nvidia’s future AI systems. For Nokia, it’s a strategic leap toward blending telecom and AI innovation, a space expected to explode in the coming years.
Trading was briefly halted before the announcement, but once news broke, investors piled in. By midday, Nokia stock was up almost 20%, underscoring Wall Street’s excitement over its deepening ties with Nvidia.
