Nokia’s Q1 Momentum Meets an AI-Cost Squeeze as Earnings Loom
Published on 07/20/2026 at 18:35 | Redaktion boerse-global.de
Nokia enters its second-quarter earnings report on 23 July with strong momentum in two high-growth segments — AI and cloud revenues surged 49% in the first three months of the year, while optical networks climbed 20% — yet the market is fixated on a very different story. A brutal seven-day sell-off has erased 13.47% of the share price, dragging the stock to €8.90, and the trigger came not from Helsinki but from Stockholm.
Ericsson’s disappointing quarterly numbers on Tuesday sent a chill through the telecom-equipment sector. The Swedish rival warned that rising costs for memory chips and semiconductor components, driven by insatiable demand for AI infrastructure, would squeeze margins. Nokia shareholders quickly extrapolated that risk to their own holding, sparking a wave of profit-taking after a months-long rally. The broader technology sell-off that hit the Nasdaq and S&P 500 only amplified the pressure.
The scale of the correction is stark. From its 52-week high of €14.97 reached in early June, Nokia has lost more than 40%. Over the past month the stock is down 25.27%, and the 14-day relative strength index has fallen to 31.5, pushing into oversold territory. The MACD indicator remains below its signal line, suggesting negative momentum in the near term. Still, the longer-term picture is far from bleak: the shares have more than doubled over the past year and are up 59.21% year to date, a rally built on hopes for Nokia’s AI-networking business.
Should investors sell immediately? Or is it worth buying Nokia?
Analysts on Wall Street are sticking with their bullish calls despite the chaos. The average price target for Nokia’s New York-listed shares stands at $14.67, with a consensus rating of “Buy.” JPMorgan raised its target to $21 in June, maintaining an “Overweight” stance, while Argus Research upgraded the stock to “Buy” in April with a $15 target. The key near-term support level is seen at $10, a psychological floor that will be tested if the sell-off deepens.
Behind the noise, Nokia’s underlying order book offers some reassurance. Reports indicate that order intake and backlog grew in the second quarter, driven mainly by land-based projects such as 5G rollouts and fibre-optic expansion. Operating profitability is expected to have improved thanks to scale effects, while the submarine-cable and satellite-communications business also benefited from higher-margin services. Yet nearly half of the backlog is concentrated in the land segment, a single-basket risk should demand in that area weaken.
Political winds may also shift in Nokia’s favour. India’s trade minister, Piyush Goyal, visited Finland between 13 and 18 July and met with Nokia’s leadership, encouraging the company to expand manufacturing, research and digital infrastructure in India. Talks focused on artificial intelligence, 6G and quantum technologies — areas that could become central to Nokia’s long-term positioning. Meanwhile, US asset manager Hollencrest Capital Management increased its Nokia stake sharply in the first quarter, now holding 50,664 shares.
The coming earnings report is the real test. Analysts expect second-quarter revenue of €4.822 billion and a comparable operating profit of €376 million. For the full year, Nokia targets an operating result between €2.0 billion and €2.5 billion, with roughly 72% of that — about €1.70 billion — expected to come in the second half. Earnings per share are forecast at €0.07, up from €0.04 a year earlier. With annualised 30-day volatility at 66.61%, investors are bracing for wide swings around the release. The central question is whether Nokia can show that its AI-networking operations can absorb the cost pressures that Ericsson flagged — or whether the market’s fear of a sector-wide squeeze is about to be vindicated.
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Nokia Stock: New Analysis - 20 July
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