COPENHAGEN (Reuters) - Finnish telecoms company Nokia on Monday said Pekka Lundmark would step down as CEO, and that it has appointed Justin Hotard to take over his role.

Hotard, who will take up the position on April 1, is currently the executive vice president and general manager of Data Center & AI Group at Intel, according to the chipmaker's website.

Telecom gear makers, struggling with lower sales of 5G equipment, have been looking for ways to diversify their markets and break into growing 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's Chair Sari Baldauf said in a statement.

Shares were up 1.6% at 4.7 euros by 0854 GMT on Helsinki's stock exchange, which was up just 0.45%.

JPMorgan analysts called the CEO transition a surprise as they said Lundmark had been successful at "steadying the ship".

"Given that a new CEO has already been appointed, it looks like this transition was in the works for some time. With the Datacentre and AI background of the new CEO, it is clear which areas Nokia wants to focus on," they said in a note.

This view was echoed by analysts at Inderes, who see the change as a strategic shift towards Nokia's Network Infrastructure unit, where data centres and AI investments are fostering new growth opportunities.

Last year, Nokia made a move to buy U.S. optical networking gear maker Infinera in a $2.3 billion deal to gain from the billions of dollars in investment pouring into data centres to cater to the rise of artificial intelligence.

Lundmark, who was appointed as Nokia's CEO in 2020, will stay on as an advisor to Hotard until the end of the year, the company said.

In September, Nokia declined media reports saying the company was looking for a new chief executive.

"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.

Nokia shares are up 27.85% over the past year, but are down more than 90% since peaking in June 2000.

Its infrastructure business, increasingly integrating AI technologies, focuses on building and maintaining communication systems, including data centres, servers, and routers.

Its mobile networks unit concentrates on technologies and services enabling mobile communication, including the development and management of cell towers and 5G technologies.

(Reporting by Stine Jacobsen, editing by Louise Breusch Rasmussen, Varun H K, Anne Kauranen and Louise Heavens)