Nokia's Cloud Bet Gathers Momentum, but Stock's Slide and Analyst Discord Keep Investors on Edge
Published on 07/08/2026 at 22:56 | Redaktion boerse-global.de
The Finnish telecom equipment maker is quietly assembling the pieces of a transformation that aims to shift its identity from a hardware vendor to a cloud-native infrastructure provider. A successful test with Philippine carrier Smart Communications, a new exclusive contract with Orange Belgium, and a full migration of its resource planning to the Microsoft cloud all point to progress. Yet Nokia’s share price tells a different story: down 1.88% to €10.15 on Wednesday, with a weekly loss of 10.45% and a monthly decline of nearly 20%. The stock still holds a year-to-date gain of 82.38%, but the recent pullback has tested investors’ patience.
The Smart Communications trial is a case in point. Nokia’s new roaming software allows travellers’ data to flow through local network nodes rather than being routed back to the home network, cutting latency and giving operators full billing control. For Nokia, the test validates the commercial readiness of its cloud-based services — a key pillar in the company’s push toward higher-margin software revenue. That push also includes a deep internal overhaul: Nokia is moving its entire enterprise resource planning system to the Microsoft cloud, using the latest SAP platform to embed real-time analytics and artificial intelligence into its own operations.
A contract win in Belgium and a major investor’s quiet exit
On the commercial front, Nokia scored a victory earlier this month when Orange Belgium selected the Finns as the sole supplier for a new optical core network. The network is designed to handle the surge in data traffic driven by AI applications. The win builds on a broader collaboration with cloud hyperscalers — Jefferies analyst Janardan Menon recently highlighted growing cooperation between Nokia and large cloud providers across its optics portfolio, including switch orders from an unnamed hyperscaler that are accelerating growth in IP networking.
Should investors sell immediately? Or is it worth buying Nokia?
But not everyone is convinced the strategy will translate into sustainable earnings. The analyst community is unusually divided. Danske Bank rates Nokia a buy with a €14 target, while UBS is neutral at €11. LBBW has issued a sell rating with a €9.75 target. Jefferies last week lifted its price target to €13.80 from €10.70, reiterating a buy and forecasting 2027 earnings per share 16% above consensus. Barclays, however, barely moved its target from €8 to €8.50 and maintains an “underweight” stance. The gulf between the most bullish and most bearish targets underscores how uncertain the market is about Nokia’s margin trajectory.
Adding to the nervous mood, Nokia disclosed in late June that FMR LLC, the investment arm of Fidelity, had reduced its voting rights below the 5% threshold, triggering a mandatory disclosure under Finnish securities law. Whether the move reflects strategic rebalancing or a loss of conviction is unclear, but it has added an extra layer of caution ahead of the quarterly report.
Earnings week looms — and the numbers must speak
All eyes are now on July 22, when Nokia will release its second-quarter results for 2026. The company reiterated its full-year operating profit target of €2.0 billion to €2.5 billion, with the network infrastructure unit expected to grow 12-14% and the combined optical and IP networks business up 18-20%. Investors will be watching for hard evidence that the Nvidia partnership and the new network contracts are translating into revenue and, crucially, improving cloud segment margins. The trading window for insiders has closed.
Technically, the stock remains under pressure. It trades 15.92% below its 50-day moving average of €12.08 and 32.16% below its 52-week high of €14.97 from June 3. The 14-day relative strength index sits at 36.7, indicating fading momentum but not yet oversold territory. With annualized volatility at 72.30%, the next few trading sessions are likely to remain choppy. The report on July 22 will either vindicate the optimists betting on a cloud-driven turnaround or reinforce the sceptics who see a valuation that has run ahead of fundamentals.
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