A wireless carrier, once overlooked after losing the smartphone market to Apple, is now up more than 60% year to date, due to increasing demand for artificial intelligence infrastructure.

That rally caught Jim Cramer’s attention on the Sept. 16 episode of CNBC’s “Mad Money.” During the Lightning Round segment, a caller asked about it, and Cramer recommended buying it.

Nokia shares closed at $10.60 on Sept. 17, up about 62% year to date and more than 130% over the past 12 months. But the company also posted negative free cash flow of about $835 million during the second quarter, and the stock still trades far below its peak of around $29.

What Cramer likes about Nokia’s AI infrastructure setup

“I like Nokia very much. I’m glad you brought it to our attention. I think it’s a terrific situation, and I would be a buyer right here,” Cramer said on the show, according to CNBC.

His call was based on valuation and position. Nokia trades at approximately 22 times forward earnings, which is unusual in a market where AI-linked stocks usually see more than 30 times. 

Cramer compared the stock with BWX Technologies (BWXT), a nuclear power supplier he passed on during the same episode because its “price-to-earnings multiple at 30 times is too high” for the current period of high interest rates.

Nokia has repositioned itself as one of the few Western vendors selling core equipment for AI data centers. Under CEO Justin Hotard, the company earns revenue by supplying optical networking gear, IP routers, and fiber infrastructure to hyperscalers such as Microsoft (MSFT) and Google (GOOGL). It also maintains its traditional business of selling wireless network equipment to phone carriers. 

This strategy is finally paying off, as tech giants are building large data centers, which is creating record demand for Nokia’s high-speed optical networking gear.

Nokia is repositioning itself around AI networking under CEO Justin Hotard, and the market is finally paying attention.

SOPA Images / Getty Images

The Microsoft partnership fueling Nokia’s rally

Cramer’s endorsement came one day before another piece of good news arrived. On Sept. 17, Nokia disclosed an expanded partnership with Microsoft that integrates its Nokia Data Suite with Microsoft Fabric, the software company’s unified analytics platform.

Telecom operators usually wait weeks to prepare network data for AI applications, and the joint solution promises to reduce that time window to minutes. Shares went up around 3.8% on the news, and the announcement builds on earlier work between the two firms in cloud and AI.

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“Telecom providers are ready to move AI from experimentation into everyday network operations, but that requires trusted data, strong governance and platforms that can scale,” Silvia Candiani, Microsoft’s corporate vice president for worldwide telco and media, said in a press release. 

“By bringing together Nokia Data Suite and Microsoft Fabric, we are creating a faster path to turn complex network data into actionable intelligence,” she said. 

The Q2 numbers behind Nokia’s stock surge

In the second quarter, Nokia’s revenue from artificial intelligence and cloud customers more than doubled year over year to approximately $509 million, according to Nokia‘s Q2 earnings release.

Order intake in that same category reached 2.8 billion euros, which is roughly $3.2 billion at current exchange rates, and management expects about half of it to convert to revenue over the next 12 months.

Comparable operating profit also rose 18% to 434 million euros, beating consensus estimates. But reported net income fell to just 5 million euros, while free cash flow dropped into a deficit of 732 million euros, or approximately $835 million. 

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High restructuring costs caused most of this shortfall, as Nokia spent 445 million euros to streamline its European and Chinese operations. Total 2026 restructuring costs are now projected at approximately 800 million euros.

“Demand remains strong, while supply continues to be the main industry constraint, prompting our customers to place longer-term orders,” Hotard said in the earnings statement.

Hotard became CEO in April 2025 after running Intel’s data center division, and his mandate has been to reposition Nokia around AI infrastructure, data center networking, and 6G.

The Inverse Cramer risk and what NOK investors should watch

Retail traders on X (the former Twitter) and Reddit have built a following around the Inverse Cramer strategy, which bets against his high-conviction picks. According to 24/7 Wall St, that approach has returned 172% over three years, making some Nokia holders wary of the timing of his praise.

Historically, a “Mad Money” endorsement can push a stock up sharply in the following session before institutions use the rally to trim positions. Nokia’s more than 60% run this year already prices in a lot of good news, and the potential returns for a new investor are lower than they were six months ago.

Nokia investors should track three things from here: the pace at which the company converts its 2.8 billion euro AI order book into actual revenue, the timeline for free cash flow recovery once its restructuring work is finished in 2027, and how broadly telecom operators adopt the Microsoft Fabric platform.

If any of those three falls short, the stock’s current multiple could become hard to justify. Anyone chasing the recent momentum should think carefully about how much capital they put in based on Cramer’s endorsement alone.

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