Nokia’s AI Orders Surge to €2.8 Billion, but the Market Wants Proof — Not Promises
Published on 07/28/2026 at 11:01 | Redaktion boerse-global.de
Nokia just booked its biggest-ever haul of AI and cloud contracts, yet the stock is nursing wounds that look more like a hangover from a euphoric rally than a vote of no confidence in the turnaround. The disconnect between record order intake and a share price that has nearly halved from its June peak tells a story of impatience, not failure.
The Finnish network equipment maker secured €2.8 billion in AI and cloud orders during the second quarter of 2026, with revenue from that segment more than doubling year-on-year to €446 million — a 105 percent surge. Optical networks climbed 20 percent on a currency-adjusted basis, while IP networks rose 16 percent. On the surface, these are precisely the figures CEO Justin Hotard has been promising since laying out his vision for Nokia as a winner in the global AI infrastructure buildout.
Yet the market’s reaction has been brutal. The stock closed Monday at €8.14, down 13.33 percent in the past week alone and 28.41 percent over the last month. From the June record of €14.97, the decline amounts to roughly 46 percent. A 14.69 percent weekly drop and a 29.53 percent monthly slide paint a picture of panic — until you zoom out. Nokia is still up 45.62 percent year-to-date and has gained 121.14 percent over the past twelve months. That combination of a sharp short-term pullback alongside massive annual gains is the classic signature of an overheated rally cooling off, not a business model in crisis.
The technical picture supports that interpretation. The 200-day moving average sits at €7.86, leaving Nokia just 3.59 percent above that key long-term trendline. While the stock has sliced through its shorter-term averages, the broader uptrend that began roughly a year ago remains intact. The relative strength index has fallen to 30.6, hovering near oversold territory, and annualized volatility stands at 66.52 percent — suggesting a market that has been violently shaken rather than methodically sold down.
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So why the sell-off after a quarter that actually beat expectations? Net sales rose 9 percent year-on-year, driven primarily by the network infrastructure segment. Comparable gross margin improved by 70 basis points to 46 percent, reflecting the mix shift toward optical networks and the benefits of the Infinera acquisition, which closed in early 2025 and nearly doubled Nokia’s market share in high-speed optical transport. The AI and cloud segment’s order book now stands at €2.8 billion, with roughly half expected to convert into revenue over the next twelve months.
The trigger for the market’s disappointment appears to be Nokia’s decision to merely reaffirm its full-year guidance rather than raise its AI-segment targets. After a stock that more than doubled in a year, a solid “in line with expectations” landed as a letdown. Investors who had priced in an acceleration were left waiting for more concrete evidence that the record orders are translating into sustainable cash generation.
That cash question is the crux of the tension. In the same quarter, Nokia burned €0.7 billion in free cash flow, while restructuring costs tied to the Infinera integration and the buildout of the new AI-RAN platform added roughly €800 million. The company is spending heavily to position itself as a trusted hardware alternative for hyperscalers like Google and Amazon — including the purchase of NXP’s semiconductor plant in Arizona to manufacture in the U.S. and reduce reliance on the struggling traditional mobile networks business. Nvidia also invested $1 billion in late 2025 to accelerate the development of AI-native 6G networks, a strategic bet that aligns with Nokia’s ambitions.
The market is punishing precisely the expenditures that make the transformation possible. Without the Infinera integration and the AI-RAN platform, Nokia would be shut out of the very order boom it is now reporting. The stock is effectively paying the short-term price for a long-term wager — one that requires the company to show that its billion-euro investments can generate cash faster than the legacy mobile business continues to erode.
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Wall Street remains divided but far less alarmed than the share price suggests. Some houses have become more constructive following the quarterly numbers, while others maintain a cautious stance. The debate centers on the pace of Nokia’s AI transformation, not its direction.
For now, the stock sits in an unusual position: deeply oversold by momentum measures, comfortably above its long-term trendline, and coming off a quarter that exceeded expectations. That combination typically describes a sharp sentiment-driven correction rather than a fundamental breakdown. The risk of further volatility remains, particularly if AI-sector jitters persist or key support levels break. But the structural argument behind Nokia’s reinvention as a network and AI infrastructure play remains largely intact beneath the noise.
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