Nokia's AI Order Book Is Booming — But the Market Can't Decide If That's a Good Thing
Published on 08/04/2026 at 03:22 | Redaktion boerse-global.de
The most striking number in Nokia's recent earnings report isn't the revenue figure or the profit margin. It's the 2.8 billion euros in AI and cloud orders booked during the second quarter — roughly 6.3 times the company's quarterly sales. That kind of demand surge would normally be cause for unqualified celebration. Instead, it has left investors wrestling with a more uncomfortable question: can Nokia actually fund the production needed to deliver on all that promise?
The Finnish network equipment maker's shares rose 3.33 percent on Monday to close at 8.19 euros in Helsinki, recovering from Friday's 7.93-euro close. But the session was anything but smooth. The stock traded 1.8 percent higher in the morning, slipped as much as 1.7 percent into negative territory by the afternoon, then clawed its way back. New York-listed Nokia shares also gained roughly 3 percent at points during the day. The whipsaw action reflects a market that is simultaneously impressed by the order pipeline and wary of what it will take to execute on it.
A Split Verdict From the Analyst Community
Monday brought a flurry of fresh bank commentary, and the messages were anything but uniform. Bank of America lifted its price target to 18.50 dollars while maintaining a buy rating, citing the unusually large AI order book even as near-term guidance stays cautious. SEB Equities upgraded Nokia to buy with a 12-euro target, arguing that AI and cloud demand will accelerate growth and reshape the stock's valuation. Deutsche Bank, by contrast, cut its target from 13.50 to 11.50 euros — though it, too, kept a buy recommendation.
Three houses, three different signals. The consensus rating sits at "outperform" with an average price target of 10.32 euros, comfortably above current levels. But the divergence in targets — ranging from the mid-teens in dollars to 11.50 euros — underscores just how uncertain the market remains about Nokia's transformation into an AI-focused network player.
Should investors sell immediately? Or is it worth buying Nokia?
The Numbers Behind the Debate
The second-quarter figures tell a story of genuine momentum. Revenue rose 8 percent to 4.815 billion euros, operating profit climbed 18 percent to 434 million euros, and the operating margin reached 9.0 percent. Earnings per share jumped 75 percent to 0.07 euros, up from 0.04 euros a year earlier. Within the AI and cloud segment specifically, revenue surged 105 percent to 446 million euros.
CEO Justin Hotard framed the situation succinctly: demand remains strong, supply is limited. That mismatch is precisely what fuels the market's anxiety. With a free cash flow yield of just 2.9 to 3.9 percent and restructuring costs of 700 to 800 million euros on the horizon, Nokia will need to marshal significant capital to scale up production. The order backlog versus quarterly revenue ratio — 2.8 billion euros against 4.815 billion — invites legitimate questions about balance sheet capacity.
Nokia's competitive position, at least, looks favorable. Swedish rival Ericsson reported a 6 percent revenue decline for the same quarter, albeit with a healthier 12.4 percent operating margin. Nokia is growing while its main competitor shrinks, even if profitability trails somewhat.
A Back-Loaded Year Keeps Traders on Edge
Management raised its 2026 profit outlook modestly while trimming investment plans — a combination that signals improved long-term profitability alongside tighter capital discipline. But the near-term path is deliberately uneven. The company guided for third-quarter revenue growth of just 3 to 7 percent sequentially, with flat profit, before the larger earnings jump lands in the fourth quarter. The updated comparable operating profit target stands at 2.1 to 2.6 billion euros for the full year. Through the first half, Nokia delivered only 735 million euros — meaning the second half must deliver a substantial acceleration.
That staggered pattern all but guarantees volatility around each quarterly report as the market weighs short-term softness against the AI order book and the 2026 targets. The annualized volatility over the past 30 trading days sits at nearly 69 percent — a figure that captures the nervousness surrounding every new data point.
Nokia at a turning point? This analysis reveals what investors need to know now.
Technical Signals Point Both Ways
The stock's recent trajectory has been punishing. After jumping above the 12-euro mark in mid-July, shares drifted steadily down toward the 8-to-9-euro range. Monday's bounce brought the price back toward the 200-day moving average, a level chart analysts often treat as meaningful support. Yet even after the recovery, the stock remains roughly 45 percent below its 52-week high of 14.97 euros, reached in early June.
The relative strength index stands at 36.8, in the lower range and near oversold territory — a technical hint that Monday's rebound may be supported by positioning after weeks of losses. Year to date, Nokia is still up 46.58 percent despite all the turbulence.
The new AI-RAN platform, developed with Nvidia's Aerial technology, adds another layer to the story, positioning Nokia for 6G and higher-margin software revenue. But for now, the central tension remains: a record order book that promises substantially higher revenue, set against the investment required to deliver it — and a market that cannot quite agree on how to price that trade-off. Monday's intraday swings captured that dilemma in miniature.
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