The disconnect between Nokia’s operational momentum and its share price has rarely been starker. On Thursday, the Finnish network equipment maker reported a second-quarter earnings beat driven by an explosion in artificial intelligence infrastructure demand, yet the stock barely budged — closing at €9.02, down 0.66% on the day. Over the past month, the shares have shed 25% of their value, a slide that has erased much of the year’s earlier gains despite a 134% rally over the trailing twelve months.
CEO Justin Hotard described the environment as an “AI supercycle,” and the order book backs him up. Nokia booked €2.8 billion in AI and cloud-related orders during the quarter, nearly triple the €1 billion recorded in the first three months of the year. Revenue from that segment more than doubled, jumping 105% to €446 million. The company warned that delivery capacity is tightening, prompting customers to lock in supply through long-term commitments.
The broader network infrastructure division also showed renewed strength. On a currency-adjusted basis, revenue rose 12%, led by optical networks — up 20% — and IP networking, which gained 16%. That momentum helped push comparable operating profit 18% higher to €434 million, comfortably above the €382 million analysts had penciled in. Comparable revenue hit €4.815 billion, an 8% year-on-year increase, while the comparable operating margin improved 70 basis points to 9.0%.
The headline margin, however, told a different story, falling to minus 1.0% after accelerated restructuring charges and the reclassification of certain business lines. Nokia expects total restructuring costs of around €800 million for the full year.
The company also raised its full-year guidance, albeit for largely technical reasons. Comparable operating profit is now seen in a range of €2.1 billion to €2.6 billion, up from the previous €2.0 billion to €2.5 billion, after Nokia reclassified its Fixed Wireless Access CPE and Enterprise Campus Edge units as discontinued operations. A dividend of €0.04 per share was confirmed, with a record date of July 28, 2026, and payment due on August 6.
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For the third quarter, management struck a cautious tone. Revenue is expected to grow 3% to 7% sequentially, but operating profit is likely to hold steady at Q2 levels as the timing of software revenue recognition creates a temporary drag.
The stock now trades roughly 40% below its 52-week high of €14.97, reached in early June. The 14-day relative strength index sits at 35.6, a level some chart watchers consider oversold, suggesting the next major move could hinge on how investors digest Thursday’s numbers.
Adding to the narrative, Nokia deepened its partnership with Nvidia in May, with the chipmaker investing $1 billion in the company. The collaboration focuses on AI-RAN technology, designed to process AI workloads directly within mobile networks. In mid-July, Nokia unveiled what it called the industry’s first commercial AI-powered radio access network platform, targeting a more than 100% improvement in spectral efficiency by 2028.
Investors are now watching the book-to-bill ratio closely. In the first quarter, the AI and cloud segment posted a ratio of 3x — meaning orders far outpaced billings — and the second-quarter figure will signal whether that pipeline is converting into recognized revenue. Management is betting heavily on the fourth quarter, when the bulging AI order book is expected to translate into sales and deliver the decisive growth spurt needed to close the year on a high note.
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