The numbers tell a story of transformation. Nokia’s second-quarter earnings per share came in at €0.07, up from €0.04 a year earlier and ahead of the €0.05 analysts had penciled in. Revenue climbed to €4.82 billion from €4.44 billion. The AI & Cloud division saw its order intake hit €2.8 billion, with segment sales more than doubling. On the surface, this is a company finally shedding its legacy identity as a staid network equipment vendor and embracing the artificial intelligence boom.
Yet beneath the headline figures lies a more complicated picture. The stock that has rewarded investors with a 64 percent gain since the start of the year — and roughly 160 percent over twelve months — is now trading at €9.19, about 9.8 percent below its 50-day moving average of €10.19. The seven-day gain of 13 percent masks a 30-day pullback of 5.9 percent. With annualized 30-day volatility of 74 percent, Nokia ranks among the most jittery large-cap stocks in Europe.
The AI-RAN Bet
The optimism centers on the AI-RAN platform launched commercially in August, built on Nvidia’s Aerial technology. The offering is designed to extract more capacity from existing 4G and 5G radio networks while laying the software groundwork for 6G. Pilot projects are slated for late this year, with commercial availability targeted for 2027 — as a subscription model.
That timeline is both the opportunity and the risk. The market has already priced in a great deal of enthusiasm: Bank of America reaffirmed its buy rating with a price target of $18.50, while SEB Equities upgraded the stock to buy with a €12 target. The two figures aren’t directly comparable given different currency bases, but both signal meaningful upside from current levels.
The question analysts keep circling back to is straightforward: how quickly can Nokia convert that €2.8 billion order backlog into recurring revenue and margin expansion? Investors are no longer rewarding mere order announcements — they want to see actual cash conversion.
A Portfolio in Transition
Behind the AI narrative, Nokia is quietly reshaping its business structure. The Fixed Wireless Access CPE and Enterprise Campus Edge divisions have been reclassified as discontinued operations. The CPE business is slated for sale to Inseego, while a divestment of the Enterprise Campus Edge unit looks highly probable.
Restructuring costs for the year are pegged at €800 million, with an additional €350 million in integration expenses tied to the consolidation of the China joint venture. Capital expenditure guidance has been trimmed to €800-900 million, even as the company pushes ahead with capacity expansion.
Should investors sell immediately? Or is it worth buying Nokia?
The manufacturing footprint is growing in the United States. A new fab unit in San Jose, California is set to ramp up in the fourth quarter, while Nokia plans to tenfold its advanced testing and packaging capacity at its Pennsylvania site starting in the third quarter. In July, the company signed a definitive agreement to acquire NXP Semiconductors’ Chandler campus in Arizona — initially leasing the facility from early 2027 before converting it to indium phosphide semiconductor production for optical components, with full ownership expected by the first quarter of 2029.
The Regulatory Wildcard
A potentially significant tailwind sits outside Nokia’s direct control. The US Federal Communications Commission is expected to ban Chinese optical transceivers, a move that could hand Nokia additional market share among American network operators. But the prohibition remains speculative — anticipated, not enacted — and a regulatory failure would remove one of the key growth drivers from the bull case.
The company’s balance sheet provides some cushion: €5.46 billion in cash against €2.33 billion in long-term debt. That financial flexibility allows Nokia to fund the Nvidia partnership without jeopardizing its raised guidance for comparable operating profit of €2.1 billion to €2.6 billion for the full year.
What Comes Next
Management has signaled that third-quarter net sales growth of 3 to 7 percent quarter-on-quarter is in reach, though the company doesn’t expect a dramatic earnings jump until the fourth quarter. The dividend remains unchanged at €0.04 per share.
The second quarter already demonstrated the momentum: net sales rose 9 percent year-on-year, gross margin expanded 70 basis points to 46 percent, and the AI & Cloud segment’s order intake of €2.8 billion underscored the demand for AI infrastructure.
Nokia has also been strengthening its Asian ties — in early August, it signed a 5G expansion agreement with Taiwan Mobile, delivering its AirScale portfolio including new baseband and radio solutions alongside advanced software features.
The stock currently sits 14 percent above its 200-day average, suggesting the medium-term trend remains intact. But the distance from the 52-week high — a gap of 38 percent — serves as a reminder that this rally has already experienced one significant correction. The next test comes as the company works through its FY26 guidance: whether the order surge translates into a sustainable earnings trajectory, or whether the AI story proves to be a bright flash that fades under the weight of execution challenges.
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