Nokia Shares Bounce Ahead of Earnings, But Ericsson's Shadow Looms Over Margins
Published on 07/21/2026 at 19:06 | Redaktion boerse-global.de
Nokia’s stock staged a sharp recovery on Tuesday, climbing 5.53% to €9.38 after closing the previous session at €8.89. The rebound comes just two days before the Finnish telecom equipment maker publishes its second-quarter results on July 23, offering a moment of relief after a brutal 27% slide over the past month. Yet despite the bounce, the share price remains 9.6% lower on a weekly basis and sits more than a third below its 52-week high of €14.97, reached in early June.
The rally has a technical tailwind: the relative strength index stands at 36.3, signaling oversold conditions that often trigger a snapback regardless of fundamentals. But the broader context is less forgiving. Nokia’s stock has underperformed its Swedish rival Ericsson by 5.2 percentage points over the past week and trailed Finland’s OMXH25 index by 18.7 points — a gap that analysts interpret as deepening concern that sector-wide headwinds are hitting Nokia harder. Ericsson’s own second-quarter report on July 14 sent its shares tumbling 8.7% in pre-market trading, even as management highlighted operational discipline. The culprit: rising component costs and chip inflation, which finance chief Lars Sandström warned are compounding for the entire industry.
For Nokia, the earnings release on Thursday will be a critical test of whether its AI-driven growth narrative can offset those cost pressures. The company has already guided for full-year operating profit of €2 billion to €2.5 billion, with network infrastructure revenue seen growing 12% to 14% and optical/IP networks expanding 18% to 20%. In the first quarter, AI-related revenue surged 49% year-on-year to roughly €1 billion, helped by a $1 billion partnership with Nvidia that delivered its first commercial AI-RAN platform this month. CEO Justin Hotard has also raised the growth outlook for optical and IP networks, and fresh deals with Taiwan Mobile and defense player NestAI underscore the broadening of Nokia’s customer base.
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However, analysts caution that Thursday’s market reaction will hinge less on top-line growth and more on margins. The consensus calls for a 7.2% sequential revenue increase, but gross margin is expected to shrink by 80 basis points to 44.7%. A sharper contraction — sparked by continued component inflation or a slowdown in AI network orders — could weigh on the full-year profit target. Currency effects are unlikely to muddy the picture: the euro-dollar rate stood at 1.1439 on Friday, just 0.5% below Nokia’s planning assumption. That leaves profitability entirely dependent on product mix and input costs, the same battleground where Ericsson stumbled.
Investor positioning has been shifting ahead of the numbers. JPMorgan recently lifted its price target on Nokia to $21, well above the consensus of $12.57, which still rates the shares a moderate buy. On the flip side, major shareholder FMR LLC saw its stake slip below the 5% reporting threshold, while a June 2 sale of Nokia shares by U.S. Representative Laurel M. Lee (valued between $1,001 and $15,000) was only disclosed on July 19. Technically, the stock remains 20.93% below its 50-day moving average — a sign that the correction may not be over — and annualized volatility sits at 67%. Thursday’s report will show whether the AI-network story can deliver the margin proof that investors are demanding, or whether the cost pressures that rattled Ericsson will keep Nokia in a prolonged consolidation.
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