Nokia's Breakneck 129% Surge Meets Its First Real Skepticism

Helsinki — Nokia’s stock has more than doubled in the first five months of 2026, vaulting from a sleepy telecom play to a red-hot AI infrastructure bet. But the rally has reached a critical juncture where valuation and execution collide. The shares closed at €12.76 on Friday, slipping 2.67%, yet still up 129.08% since January. That leaves them nearly 10% below the 52-week high of €14.14 — and roughly 100% above the 200-day moving average.

The problem is that the optimism has far outpaced the fundamentals. The forward price-to-earnings ratio has ballooned from around 17 to roughly 36, a rerating that analysts and investors alike are starting to question. Nokia’s own medium-term guidance — comparable operating profit of €2.0–€2.5 billion for 2026, rising to €2.7–€3.2 billion by 2028 — looks modest next to the stock’s current trajectory. The average analyst price target now sits about 25% below market levels.

AI’s outsized weight on a small base

What’s driving the euphoria? A surge in orders from AI and cloud customers, which topped €1 billion in the first quarter. That segment, however, contributed only 8% of total group revenue. The bulk of Nokia’s sales still comes from traditional mobile networks, which account for more than half. Fixed Networks actually shrank 13% year-on-year in Q1.

The bright spots are real but concentrated. Network Infrastructure revenue grew 6% on a currency- and portfolio-adjusted basis, with Optical Networks jumping 20%. AI and cloud-specific revenue climbed 49%. Nokia expects Network Infrastructure to expand 12–14% in full-year 2026, with IP and Optical together rising 18–20%. But the legacy drag means that any stumble in the AI narrative could hit the stock hard.

Should investors sell immediately? Or is it worth buying Nokia?

A week of live tests in Málaga and beyond

Nokia is about to face a series of reality checks. From June 2 to June 5, the company will be a gold-patron sponsor at the EuCNC & 6G Summit in Málaga, showcasing low-latency teleoperation, immersive telepresence, and early congestion signaling via L4S. For a stock priced on next-generation networking hopes, the demos need to do more than impress — they must signal concrete demand. The market is already pricing Nokia less as a traditional telecom equipment vendor and more as an AI-native infrastructure play, so every signal from optical and low-latency technologies carries extra weight.

Compounding the technology scrutiny, the US economic calendar packs its own punch. The ISM manufacturing index lands on June 1, the services gauge on June 3, and the May jobs report on June 5. Strong data could buoy growth stocks; weak prints might trigger profit-taking after the steepest rally Nokia has seen in years.

The July 23 reckoning

The ultimate arbiter, however, will be Nokia’s second-quarter results on July 23. That will be the first hard evidence of whether the AI-infrastructure order book is translating into sustainable revenue growth. New optical-network products are not expected to enter sampling until mid-2027, with series production in the second half of that year. Until then, the stock lives and dies on incoming orders and visible demand signals.

Nokia at a turning point? This analysis reveals what investors need to know now.

For now, Nokia finds itself in an unusual position: a 129% gainer that needs to prove it deserves the multiple. The Málaga demos and the upcoming macro data will test whether the story has legs — or whether gravity is about to reassert itself.

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