1 week ago
26
Nokia has announced that Pekka Lundmark will step down as CEO, with Justin Hotard set to take over the role on April 1.
Hotard currently serves as the executive vice president and general manager of the Data Center & AI Group at Intel, according to the chipmaker’s website.
The leadership change comes as telecom equipment makers, including Nokia, grapple with declining sales of 5G technology and seek to expand into high-growth areas such as artificial intelligence.
“He has a strong track record of accelerating growth in technology companies along with vast expertise in AI and data centre markets, which are critical areas for Nokia’s future growth,” Nokia Chair Sari Baldauf said in a statement.
Following the announcement, Nokia’s shares rose 1.6% to €4.7 by 08:54 GMT, outpacing the broader Helsinki stock exchange, which was up 0.45%.
JPMorgan analysts described the CEO transition as unexpected, noting Lundmark had been effective in stabilising the company.
“Given that a new CEO has already been appointed, it looks like this transition was in the works for some time. With the data centre and AI background of the new CEO, it is clear which areas Nokia wants to focus on,” they said in a note.
Analysts at Inderes echoed this sentiment, interpreting the leadership change as a strategic pivot towards Nokia’s Network Infrastructure unit, where investments in AI and data centres are driving new growth opportunities.
Lundmark, who took over as Nokia’s CEO in 2020, will remain as an advisor to Hotard until the end of the year.
The company revealed that succession planning began when Lundmark indicated his intention to step away from executive roles once Nokia’s repositioning efforts were more advanced.
“The planning for this leadership transition was initiated when Pekka indicated to the Board that he would like to consider moving on from executive roles when the repositioning of the business was in a more advanced stage, and when the right successor had been identified,” Baldauf said.
The leadership shift aligns with Nokia’s broader efforts to capitalise on AI-driven infrastructure development.
Last year, the company announced a $2.3 billion deal to acquire US optical networking gear maker [Infinera], aiming to leverage the growing investments in data centres fueled by artificial intelligence.
Nokia shares have gained 27.85% over the past year but remain down more than 90% from their peak in June 2000.
Boluwatife Enome
Follow us on:
English (US) ·