Cramer: Buy Nokia Stock as an AI Play

On September 18 and 19, 2026, Jim Cramer recommended buying Nokia stock on his CNBC show "Mad Money," describing the Finnish telecom equipment maker as a "beaten-down tech legend of the 90s" that should benefit from the AI boom. The US market commentator justified his recommendation with a doubling of AI orders at Nokia and said he himself bought shares at a 22x forward P/E ratio.

Doubling of AI Orders as a Buy Argument

Cramer positioned Nokia as an "AI Supercycle Winner" and pointed to strong growth in the company's AI and cloud business. AI and cloud revenues had doubled, which justified the 22x forward P/E ratio, argued the stock market expert. By comparison, Cramer rejected BWX Technologies with a 30x forward P/E ratio as overvalued, demonstrating his selective approach to valuations of AI-adjacent companies.

Nokia – once a market leader in mobile phones in the 1990s and early 2000s – today focuses on telecommunications infrastructure, particularly 5G network equipment and increasingly on AI-powered cloud solutions. The company has transformed from a handset manufacturer to a supplier of mobile network equipment and data centers.

Negative Free Cash Flow as a Risk Factor

Despite positive revenue growth in the AI segment, Cramer pointed to a significant risk factor: In the second quarter of 2026, Nokia reported negative free cash flow of $835 million. This cash outflow represents a financial constraint, even if order growth in the AI segment is strong.

Free cash flow refers to the liquid funds available to a company after deducting all investments – a negative value means Nokia is spending more money than it is taking in. For investors, this is an important indicator of financial stability, especially in growth-oriented investments.

Strategic Shift in AI Investments

The Nokia recommendation fits with Cramer's broader AI investment strategy for 2026, which he unveiled in late 2025. The stock market expert moved away from investing in companies that develop AI infrastructure, instead focusing on "established companies using AI to reduce costs and increase profits." Nokia falls into this category as a user and seller of AI-powered networking technology, not as a developer of foundational AI technologies.

On September 16, 2026, Cramer reaffirmed his generally positive stance on AI stocks, stating he sees no signs of a slowdown in AI spending. Despite growing concerns about the development pace of new AI models, he advised buying AI stocks during market downturns.

Valuation Discipline Despite AI Euphoria

Cramer's rejection of BWX Technologies on September 18, 2026, shows that despite his bullish AI thesis, he does not accept every valuation. He rejected a 30x forward P/E ratio as too high – in contrast to Nokia's 22x multiple. The differentiation appears to hinge on revenue growth metrics: In Cramer's logic, Nokia's doubled AI and cloud revenues justify a higher valuation than companies without comparable growth dynamics.

As of September 10, 2026, Cramer managed a portfolio of 33 stocks and gave explicit buy recommendations for six of them. For one unnamed well-known stock, he named an entry price of "maybe $96."

Market Environment for Tech Stocks

The recommendation came against the backdrop of a mixed market environment: The NASDAQ Composite stood at 26,522.55 points on September 18, 2026, and rose 0.39 percent, while the S&P 500 remained nearly flat at 7,643.13 points (up 0.03 percent). The DAX declined 1.35 percent to 25,311.5 points over the same period.