Nokia’s Double-Edged AI Boom: Record Orders Meet a Chip Squeeze That Won’t Quit
Published on 07/25/2026 at 11:11 | Redaktion boerse-global.de
Nokia is living a contradiction. The Finnish telecom equipment maker just posted its strongest quarter in years, with AI-driven demand sending orders through the roof. Yet its stock has been hammered, shedding nearly a third of its value in a month. The culprit isn’t weak sales or a profit miss — it’s a warning from the CEO that the very boom fueling Nokia’s growth is also choking its supply chain.
Shares slid 6.32% on Friday to close at €8.06, extending the weekly loss to 9.38%. Over the past 30 days, the stock has cratered 33.53%, leaving it 46.16% below the 52-week high of €14.97 reached in early June. The sell-off has been brutal enough to push the relative strength index to 29.5, deep into oversold territory. The stock now trades just 2.84% above its 200-day moving average of €7.84, a level that could act as a critical support floor in the sessions ahead.
The disconnect between Nokia’s operational performance and its market reception is stark. Second-quarter revenue rose 8% to €4.815 billion — or 9% on a constant-currency basis — driven by a near-doubling of net sales in the AI and Cloud segment to €446 million. Order intake in that unit hit a record €2.8 billion, with roughly half expected to convert into revenue over the next 12 months. Operating profit climbed 18% to €434 million, and management reaffirmed its full-year guidance, forecasting third-quarter revenue growth of 3% to 7%.
But on the earnings call, CEO Justin Hotard delivered a sobering counterpoint. He warned that shortages of DRAM memory chips could persist into 2027, as AI hyperscalers vacuum up available capacity and drive component costs higher. Hotard described the risk as the single most significant challenge facing the company. The warning struck a nerve: Nokia’s Swedish rival Ericsson had already tumbled nearly 12% on July 14 after flagging the same cost pressure from expensive memory chips, dragging the entire telecom equipment sector lower.
Should investors sell immediately? Or is it worth buying Nokia?
The irony is hard to miss. The AI boom that is filling Nokia’s order book is also creating the supply bottleneck that threatens to cap its growth. The company is now wrestling with a problem of its own making — success has turned into a logistical headache. In the fixed networks division, currency-adjusted sales slipped 2%, with a 16% drop in fiber-optic consumer terminals partly offset by an 18% gain in operator network termination devices, as Nokia deliberately shifts its portfolio toward higher-margin products.
Analysts are split on how to read the situation. Oliver Wong at Bank of America Securities maintained his buy rating and raised his price target from €15.60 to €16.00, betting that the fundamental strength in AI infrastructure will eventually win out over near-term supply anxieties. JPMorgan struck a more cautious tone, noting that Nokia’s guidance, while reaffirmed, came in below consensus estimates. The bank advised investors to view the outlook in the context of the strong second quarter and the hefty AI cloud order pipeline.
Nokia has also raised its 2026 operating profit forecast to a range of €2.1 billion to €2.6 billion, a signal that management sees the current turbulence as temporary. The company has been repositioning itself for the long haul: it acquired a chip fabrication campus in Arizona and expanded its 5G partnership with Taiwan Mobile. With a market capitalization of €48.57 billion, Nokia is no longer a turnaround story but an established player navigating the messy transition from legacy networking to high-margin AI infrastructure.
Nokia at a turning point? This analysis reveals what investors need to know now.
The technical picture, however, will need mending before the bulls can reclaim control. The stock broke through the so-called Golden Pocket — the Fibonacci zone between 0.618 and 0.65 that had acted as support in April — and that level now threatens to flip into resistance. The next downside target sits roughly 12.6% below Thursday’s close, in a consolidation zone from March and April that could attract buyers.
For now, the market is fixated on the supply-side risk rather than the demand-side opportunity. Whether Nokia can resolve its chip constraints before the narrative shifts back to growth will determine whether this sell-off is a buying opportunity or a warning of deeper trouble. The stock’s proximity to the 200-day average suggests a decision point is near.
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