Nokia Strengthens AI Partnership with Microsoft Amid Revenue Growth Projections

Nokia Corporation has strengthened its partnership with Microsoft in AI-focused technologies and reported broader trials of its AI-RAN (Radio Access Network) solutions with global telecom operators. This development suggests Nokia is expanding its role within customers' day-to-day network operations, which could influence recurring software and services demand as well as switching costs over time.

The expanded partnership with Microsoft appears to support Nokia's investment narrative, which hinges on the company's ability to improve its low net margin base through AI-driven automation. The Microsoft Fabric tie-up is aimed at turning Nokia's telco software and data assets into higher-value software and services. However, near-term execution in Mobile Networks and carrier capex timing remain key swing factors, while currency and pricing pressure are also significant risks.

One of the most significant aspects of the expanded partnership is the collaboration around a unified telco data foundation. This initiative links directly to Nokia's AI-RAN and automation story, providing operators with an operational path from siloed data to agent-based use cases such as autonomous VoNR assurance, RAN geo experience, and predictive maintenance. This could support Cloud and Network Services and higher-margin software revenues over time.

Analysts forecast Nokia Oyj's revenue to reach €23.5 billion by 2029, with earnings increasing to €2.6 billion from €702 million today. An alternate view suggests commoditization risk, where Nokia's extended Microsoft AI partnership may help but bearish analysts see tighter room for error, forecasting revenue of about €21.8 billion and earnings of roughly €1.8 billion by 2029.