Nokia shares climb 62% YTD on strong AI infrastructure demand and a new Microsoft partnership, earning a buy rating from Jim Cramer despite ongoing restructuring headwinds.
Cramer recommends buying Nokia due to AI infrastructure demand and a new Microsoft partnership, despite negative free cash flow.
Microsoft expanded its partnership with Nokia by integrating Nokia Data Suite with Microsoft Fabric, strengthening its AI and telecom data platform.
Cramer passed on BWX Technologies because its 30 times price-to-earnings multiple is too high in the current high-interest-rate environment.
Google is mentioned as a hyperscaler customer of Nokia's optical networking and data center equipment, but no direct investment thesis is made.
Nokia shares have surged over 60% this year as the company pivots toward AI data center infrastructure. Jim Cramer recently endorsed the stock, citing a favorable valuation compared to other tech peers, even as the company navigates significant restructuring costs and negative free cash flow.
Cramer views Nokia as a 'terrific situation' due to its role in supplying AI data center equipment and its relatively attractive valuation compared to other high-multiple AI stocks.
Investors face risks related to the company's negative free cash flow, high restructuring costs, and the need to successfully convert a 2.8 billion euro AI order book into actual revenue.