Nokia’s new chief executive is championing an artificial intelligence “supercycle,” driving the company’s financial performance even as broader market concerns about a potential bubble persist.
Justin Hotard, who took the helm in April, likens the current AI boom to the internet revolution of the 1990s, asserting strong long-term growth prospects for the technology.
He dismissed investor fears of an AI market bubble. Hotard stated, “I fundamentally believe we are at the forefront of an AI supercycle, very similar to the 1990s with the internet. Even if there is a bubble or a temporary downturn, the long-term trends are favorable.”
This optimistic outlook accompanies Nokia’s recent financial results. The company reported adjusted quarterly profits of USD $505 million, significantly surpassing analyst expectations of USD $376 million.
The telecommunications firm attributes its strong showing to robust demand for optical and cloud solutions, particularly following its acquisition of U.S.-based Infinera, a specialist in optical networks.
Clients in the artificial intelligence and cloud sectors contributed up to 6% of Nokia’s total sales during the quarter. This growth reflects the increasing integration of AI into data centers and global networks.
Hotard’s confidence, however, contrasts with broader market skepticism. A Bank of America survey indicated that many fund managers believe AI stocks might be overvalued.
Prominent tech figures, including Amazon founder Jeff Bezos and OpenAI CEO Sam Altman, have also cautioned that current market euphoria could precede significant losses.
The strategic shift toward artificial intelligence marks Nokia’s most substantial transformation since it divested its mobile phone division in 2013.
While mobile network services remain the core of its business, the company is actively integrating AI into key areas such as radio access and fiber optic networks.
Nokia faced challenges earlier this year, having reduced its annual profit forecast in July due to the impact of tariff wars and currency fluctuations.
The company currently projects operating profits between USD $1.86 billion and USD $2.44 billion for 2025.
Hotard is scheduled to unveil his comprehensive growth strategy at an upcoming Capital Markets Day event. Analysts expect this presentation to outline Nokia’s plan to solidify its position in the global AI infrastructure ecosystem.