Nokia’s AI Revenue Doubles, but a €732 Million Cash Drain Sends the Stock Into a Tailspin
Published on 07/29/2026 at 06:51 | Redaktion boerse-global.de
The market is delivering a harsh verdict on Nokia’s latest earnings report, and it has little to do with the company’s ability to win AI-related business. Shares of the Finnish telecom equipment maker tumbled 3.24% on Tuesday to close at €7.88, bringing the one-month decline to a staggering 31.22%. The sell-off accelerated after the stock slipped below its 200-day moving average of €7.88, a level that technical traders view as a critical line in the sand.
At first glance, the operational picture looks encouraging. Nokia’s second-quarter revenue rose 8% year-over-year to €4.82 billion, and the company reported that revenue from AI and cloud customers more than doubled — a 105% surge that underscores the group’s deepening ties to the data-center buildout powering the artificial intelligence boom. Adjusted diluted earnings per share from continuing operations came in at €0.07.
Yet the market fixated on a different number: a negative free cash flow of €732 million, driven largely by timing-related working capital outflows. On top of that, restructuring charges of €390 million turned what would have been a healthy comparable operating profit into a paper loss. The result is a classic “buy the rumor, sell the news” scenario — the stock had soared to a 2024 high of €14.97 in late June on AI enthusiasm, only to shed 47.76% of its value in less than two months as investors confronted the messy financial reality of the transformation.
A Broader Tech Wreck Amplifies the Pain
Nokia’s slide did not happen in a vacuum. The sell-off unfolded against a brutal backdrop for global technology stocks. South Korea’s Kospi index crashed nearly 11%, the Philadelphia Semiconductor Index (SOX) lost as much as 6%, and the Nasdaq-100 fell almost 10% from its record high. Investors fled growth names amid mounting doubts about whether the enormous capital expenditures flowing into AI will generate adequate returns. Nokia, whose networking equipment business is increasingly tied to hyperscale data centers, got caught in the downdraft.
Should investors sell immediately? Or is it worth buying Nokia?
The company also warned that memory chip supply constraints could persist into 2027, adding another layer of uncertainty to near-term planning. And Tuesday’s trading session was complicated by the stock going ex-dividend, with Nokia paying out €0.04 per share for the quarter — a technical factor that added a small amount of mechanical selling pressure.
Technical Signals Point to Oversold Territory
From a chart perspective, the damage has been severe. The relative strength index (RSI) on a 14-day basis has fallen to 28.5, deep in oversold territory. Historically, readings at these levels have often preceded a technical bounce. The stock has also fallen nearly 32% below its 50-day moving average, a gap that suggests any recovery would need to be sharp to close the distance.
But the 200-day line at €7.88 is now the defining test. If Nokia can reclaim that level quickly, the current sell-off may prove to be a healthy correction within a longer-term uptrend. If it fails, the risk of a full-blown trend reversal increases. On a 12-month basis, the stock is still up 116.32%, and year-to-date gains stand at 39.89% — figures that remind long-term holders that the recent pain follows an extraordinary run.
Management Stays the Course, Insiders Buy the Dip
Nokia’s leadership has responded to the turbulence with a mix of reassurance and action. The company narrowed its full-year guidance for comparable operating profit to a range of €2.1 billion to €2.6 billion, a signal that management sees the underlying business as stable. Meanwhile, according to Dagens Industri, Nokia executives purchased shares during the AI-driven sell-off — a move that markets often interpret as a vote of confidence from those closest to the operations.
Analyst sentiment remains broadly constructive. JPMorgan reaffirmed its Overweight rating on Nokia’s New York-listed shares and raised its price target. The consensus among analysts still leans toward a Buy, even if the near-term price action is being dictated by macro sentiment rather than company-specific fundamentals.
Nokia at a turning point? This analysis reveals what investors need to know now.
Two Stories in One Stock
Nokia today presents a deeply divided picture. On one side, the AI and cloud business is doubling, network infrastructure is growing at double-digit rates, and the order book is filling up. On the other, the cash flow statement is bleeding red, restructuring costs are weighing on reported earnings, and the broader technology sector is in retreat.
For long-term investors, the doubling of AI revenue and the strategic positioning in data-center infrastructure are powerful arguments for eventual recovery. But in the short term, the stock will remain under pressure until Nokia can demonstrate that the cash flow problems are truly a timing issue — not a structural flaw. The next few trading sessions around the €7.88 level will likely determine whether this is a buying opportunity or the beginning of a deeper correction.
Ad
Nokia Stock: New Analysis - 29 July
Fresh Nokia information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.
Disclaimer regarding our articles: No investment advice, no buy or sell recommendation. Information on prices, companies, and markets is provided without guarantee; changes are possible at any time. Stock market transactions can lead to substantial losses. Our articles are created and reviewed in whole or in part automatically with the support of AI.
