Nokia managed to carve out a rare bright spot this week by securing a 5G expansion contract with Taiwan Mobile, a deal that embeds artificial intelligence directly into the mobile network infrastructure. The announcement lifted the Finnish network equipment maker’s Xetra-listed shares by 1.02 percent to €10.40 on Tuesday — a welcome reprieve after a punishing stretch that had knocked more than 18 percent off the stock over the prior 30 days and left it trading 30.5 percent below the June peak of €14.97.
The relief, however, comes against a backdrop of fresh selling pressure. Nokia’s American Depositary Receipts had tumbled roughly 6 percent to $11.69 on Monday, touching an intraday low of $11.60, after a weak profit forecast spooked investors. The slide was amplified by a broader technology sell-off, with the Nasdaq falling about 1 percent and the semiconductor sector under particular pressure following a disappointing outlook from SK Hynix. Geopolitical jitters — a jump in oil prices on escalating US-Iran tensions — added to the risk-off mood, even as the STOXX 600 held nearly flat.
Taiwan Mobile’s upgrade to Nokia’s latest AirScale
The market’s immediate reaction to the deal was muted — Tuesday’s gain hardly offset the cumulative damage. The stock’s 30-day annualized volatility stands at an extraordinary 72.7 percent, and the relative strength index of 41.1 suggests selling pressure has cooled but the stock has yet to reach oversold territory. Despite the pullback, the year-to-date performance remains striking: a gain of 86.78 percent, and a 146.74 percent advance over twelve months, with the share price roughly tripling from the 52-week low of €3.45 set in August 2025. The 200-day moving average at €7.64 provides a distant floor, while the 50-day average at €12.06 — now decisively breached — marks a resistance level that may cap near-term rallies.
Should investors sell immediately? Or is it worth buying Nokia?
Valuation has become an increasingly uncomfortable topic for Nokia’s bulls. The stock now trades at a price-to-earnings ratio of 66.8, far above the five-year median of 20.3. GuruFocus calculates a fair value of $5.07 per ADR, implying a 130.6 percent overvaluation against Monday’s close. The composite GF Score stands at 58 out of 100, with financial strength scoring a solid 8 of 10 but the valuation component bottoming out at 1 of 10. Nokia holds $5.46 billion in cash against $2.33 billion in long-term debt, and reported annual revenue of $19.22 billion.
Operationally, Nokia continues to push its networking agenda beyond the Taiwan deal. The company opened an AI networking innovation laboratory in Sunnyvale, California, in partnership with AMD, Keysight, Lenovo, and Nscale, focused on validating high-performance designs for AI model training and inference. In Europe, Orange Belgium has selected Nokia’s 1830 PSS platform — capable of 400G speeds — combined with the WaveSuite AI-driven automation solution to unify its fixed and mobile networks, with bandwidth ranging from 1 Gbps to 400 Gbps. Earlier in March 2026, Nokia also joined Eurofiber, NTT DATA, Greenet, and Netways to launch a 5G RedCap ecosystem for private networks. These operational wins stand in sharp contrast to the near-term valuation strain and the profit warning that rattled the ADR.
The next major test arrives on July 23, when Nokia reports second-quarter and first-half 2026 earnings. Management has guided for 5 to 9 percent sequential revenue growth, and investors will be watching closely to see whether AI-linked contracts — like the Taiwan Mobile deal — can compensate for slowing demand in traditional telecom gear. Meanwhile, a notable change in the shareholder register adds another layer: US asset manager FMR LLC has reduced its stake below the 5 percent disclosure threshold, a move that may weigh on sentiment in the weeks ahead. With the stock caught between a rich valuation and a promising AI-driven product cycle, the earnings report could determine whether the current floor holds or gives way to a deeper correction.
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