Nokia Hits 16-Year High After Launching 5G Defence System with Lockheed Martin

Nokia's Stunning Comeback

Finnish telecom equipment maker Nokia has hit its highest trading level in more than 16 years, with shares surging to a fresh 52-week high of $13.98 on Tuesday, 5 May. The stock closed at $13.42, up around 2.2% on the session, extending a remarkable rally that has seen shares climb approximately 170% over the past 12 months. The catalyst pushing Nokia to these heights is a powerful combination of defence contracts, AI infrastructure demand, and strategic corporate moves.

The Lockheed Martin Defence Partnership

The most immediate driver was a joint announcement with Lockheed Martin unveiling a modular, open-architecture 5G solution designed for US and allied military forces. The system integrates Nokia's carrier-grade 5G technology into the Department of Defense's CMOSS framework, enabling military vehicles and expeditionary platforms to leverage commercial-grade connectivity in operational environments. The partnership builds on earlier work from March 2025, when both companies integrated Nokia's military-grade 5G into Lockheed Martin's 5G.MIL Hybrid Base Station. Mike Loomis, head of Nokia Federal Solutions, framed the announcement as a deliberate alignment with Pentagon requirements.

AI and Cloud Tailwinds

The defence news amplified investor enthusiasm already stoked by Nokia's strong first-quarter results reported on 23 April. Net sales from AI and cloud customers surged 49%, while Optical Networks grew 20%. Nokia secured roughly 1 billion euros in new AI-related orders during the quarter, with CEO Justin Hotard raising the Network Infrastructure growth outlook to 12-14% for 2026. The company also continued to benefit from its 29 April agreement to divest its fixed wireless access CPE business to Inseego, sharpening its focus on mobile networks and data-centre infrastructure.

Bullish Options Activity

Options markets reflected the bullish frenzy. Traders purchased roughly 431,000 call contracts on Tuesday, a 311% jump above typical daily volume, signalling intense speculative interest in further upside.

Analyst Caution Persists

Despite the rally, Wall Street consensus remains well behind the tape. The average 12-month price target among 18 analysts stands at $9.71, implying nearly 28% downside from the current price. UBS reiterated a Neutral rating with a target equivalent to roughly $5.50, while Morningstar flagged potential overvaluation. Argus Research offered the most bullish outlook at $15. The disconnect sets up a key test: whether AI-networking and defence tailwinds can generate earnings growth fast enough to justify a stock trading at roughly 70 times trailing earnings.