Key insights
- The author expresses a bearish stance on a potential SpaceX IPO, citing expected post-IPO volatility. Instead, they recommend Nokia, a Finnish telecom company, highlighting its communications infrastructure business. The author believes Nokia is poised to benefit from the accelerating growth in internet traffic, largely driven by AI, which current platforms are not fully equipped to handle. This presents a potentially underestimated tailwind for Nokia's business.
The buzz surrounding SpaceX's public offering remains palpable. Indeed, it looks, sounds, and feels like a must-have at any price.
And I'm not touching it with a 10-foot pole. Oh, I might test the waters in the future, once shares suffer the usual post-IPO setback. In the meantime, though, I've identified something far more compelling because it's far more certain with far less volatility. That's the Finnish telecom company Nokia (NOK +5.15%).
You probably know it best as one of the once-great mobile phone makers. It's still technically in the business, too, albeit only through licensing of its tech and its brand name. But the crux of the company's business these days is communications infrastructure. It makes everything from equipment for mobile phone service providers to data center connectivity solutions to broadband platforms, and more.
These are crowded markets and, outside of artificial intelligence (AI) circles, not particularly high-growth ones. Nokia's 2025 top line of 19.9 billion euros was only about 3% better than 2024, for perspective. Operating profits fell to about one-third of the prior year's per-share bottom line.
There's a tailwind blowing here, however, that I think most of the market is simply underestimating.
Almost everyone understands that modern AI platforms can process massive amounts of digital data. What's largely being overlooked is that this data is typically delivered from outside the AI data center doing the work, and, more than that, is then sent back to an end user in a useful way.
Based on numbers from the International Telecommunication Union, Statista reports that internet traffic doubled just between 2020 and 2025, largely driven by the explosion of AI between those two points in time. It's a demand that most current telecom platforms -- and mobile platforms in particular -- just weren't prepared to handle.
This growth will only accelerate too. Nokia expects global traffic to grow around fivefold from 2024 levels through 2034, with AI accounting for a large share of this growth.
The solution, ironically enough, is to use AI to manage the overwhelming volume of digital data delivery.
And that's where Nokia has quietly become something of a standout. In October of last year, this company and AI hardware powerhouse Nvidia announced a partnership to develop artificial intelligence-powered RAN (radio access network) tech to usher in the 6G wireless telecom era capable of handling the looming explosion of AI-driven traffic.
It's not the only name working on such technology, and, for the record, the company won't see any immediate benefit from its technical capabilities on this front. Analysts are only looking for top-line growth of about 5% from Nokia this year and a little more than 5% next year. This stock's also rallied quite a bit since the collaboration with Nvidia was unveiled.
Just look -- and think -- further down the road. As artificial intelligence evolves, the mini-computer that most everyone already keeps in hand will become an AI-powered tool that never stops being used and is always communicating. NOK stock's 20% pullback from its early-June peak may be all the discount you see for a while.