Nokia's AI Push Creates a Curious Split: Credit Upgrades and Record Orders, Yet Shares Are Stuck
Published on 08/02/2026 at 16:23 | Redaktion boerse-global.de
Investors watching Nokia in recent weeks have been treated to a rare spectacle: a ratings agency upgrading the company's credit outlook at the very moment its share price was tumbling. The disconnect between the Finnish telecom equipment maker's operational trajectory and its market performance has rarely been starker.
The stock has shed roughly 30 percent over the past month, landing almost precisely on its 200-day moving average of €7.93 — a level technicians often view as a long-term support line. The Relative Strength Index sits at 33.3, a reading that suggests the equity is approaching oversold territory. Yet beneath the chart-based anxiety lies a business that, by several measures, appears to be gaining momentum.
S&P's Vote of Confidence
On July 30, S&P Global shifted its outlook on Nokia from "stable" to "positive" while affirming the long-term issuer rating at 'BBB-'. The agency cited the company's successful diversification and stable cash flow prospects as the rationale. The catalyst, according to S&P, is surging demand for network infrastructure from AI and cloud customers — a segment that is beginning to show up meaningfully in the numbers.
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During the second quarter of 2026, net sales to AI and cloud clients jumped 105 percent year over year. Order intake in that segment reached €2.8 billion, with management expecting roughly half of that to convert into revenue within the next twelve months. The AI and cloud business now contributes eight percent of group sales, and the company estimates its addressable market in this space will expand at an annual rate of 27 percent through 2028.
A Quarter of Contrasts
The Q2 results, published on July 23, underscore how much the company's fortunes now hinge on higher-margin infrastructure projects. Nokia reported an operating loss of €50 million, a figure weighed down by accelerated restructuring charges. But the comparable operating result came in at €434 million — comfortably ahead of the €372 million analysts had penciled in. On a reported basis, revenue reached €4.82 billion, leaving a net profit of just €5 million. The adjusted earnings per share stood at €0.07, while the comparable operating profit was €414 million.
The network infrastructure division proved the standout performer, with net sales climbing 12 percent on a currency-adjusted basis, driven by a 20 percent surge in optical networking. That strength prompted management to lift its full-year guidance: the company now expects comparable operating profit between €2.1 billion and €2.6 billion, up from the previous range of €2.0 billion to €2.5 billion.
A CEO's Warning on Europe's AI Ambitions
Beyond the balance sheet, chief executive Justin Hotard has been vocal about a concern that could shape Nokia's longer-term prospects. He warned that Europe is falling behind the United States and China in the race to build out AI data centers, citing insufficient infrastructure investment. Data centers already consume roughly three percent of the EU's electricity, and the gap is widening. For Nokia, the stakes are direct: a meaningful portion of its growth narrative depends on how quickly Europe closes that infrastructure deficit.
The company has been positioning itself accordingly. In May, it opened an AI networking innovation lab in Sunnyvale, California, where it works with partners including AMD, Keysight, Lenovo, and Supermicro to validate AI workloads under real-world conditions. The focus is on so-called Nokia Validated Designs, which test network architectures for AI applications. The immediate contribution to group earnings remains modest, but the strategic direction is clear.
Dividend and What Comes Next
Shareholders have a near-term event to watch: the next dividend of €0.04 per share is scheduled for payment on August 6. The ex-dividend date passed on July 28, following the earlier ex-date of July 27, when the stock first traded without the entitlement. The current dividend yield stands at 1.76 percent.
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Looking ahead, Nokia expects third-quarter net sales to rise between 3 and 7 percent sequentially. Operating profit, however, is likely to stagnate in the near term due to the timing of software revenue recognition. Management has signaled that a more pronounced earnings improvement will have to wait until the final quarter of the year.
For now, the market appears caught between two competing narratives: a share price that has been hammered over the past month and a business that keeps delivering evidence of structural progress. The stock's proximity to its 200-day average — just 0.05 percent away — leaves the technical picture finely balanced. A decisive move above that line could attract chart-following buyers; a failure to hold it might invite further selling. Analysts, for their part, see upside: the average twelve-month price target sits at €10.32, well above the current trading level.
The coming quarters will test whether the margin-thin core business can increasingly lean on the higher-margin AI division to shift the overall profitability profile — the question investors are most focused on as they weigh Nokia's dual identity as both a legacy telecom supplier and an emerging AI infrastructure play.
Disclaimer regarding our articles: No investment advice, no buy or sell recommendation. Information on prices, companies, and markets is provided without guarantee; changes are possible at any time. Stock market transactions can lead to substantial losses. Our articles are created and reviewed in whole or in part automatically with the support of AI.
