Nokia handed over 3,635,260 treasury shares to participants in its employee incentive schemes on Thursday, a no-cash transfer that underscores the Finnish network equipment maker’s commitment to retaining key talent even as it executes one of the most consequential strategic retreats in its recent history. The transaction leaves the company holding 83,991,222 of its own shares.
The timing is telling. Nokia is simultaneously tightening its grip on the AI infrastructure boom while methodically dismantling its presence in mainland China, a market that has gone from pillar to peripheral in less than a decade.
The Price of Exit
The Hangzhou radio technology research center is slated to close by the end of 2026, with roughly 1,600 positions eliminated. That announcement, made internally in mid-August, was followed days later by confirmation that Nokia’s other Chinese sites—in Beijing, Shanghai, Chengdu and Qingdao—would also shutter in staggered phases. The restructuring touches a Greater China workforce of approximately 7,200 employees.
The financial toll is steep. Nokia has raised its China-specific restructuring provisions for 2026 from €250 million to €350 million, part of a broader €800 million restructuring bill for the current year. Cash outflows are expected to land between €700 million and €800 million, with €390 million in related charges already booked in the second quarter.
The erosion behind this exit is stark: Greater China revenue collapsed from €2.2 billion in 2018 to €913 million last year—a 58 percent decline—and the company’s Chinese market share now sits below 3 percent. The backdrop includes a signal from Chinese authorities, known since September 2025, that Nokia could be excluded from the market on security grounds, a mechanism previously applied to Huawei and ZTE.
AI Momentum Offsets the Bleed
Against that contraction, Nokia’s AI and cloud franchise is firing on all cylinders. Second-quarter net sales rose 9 percent to €4.82 billion, while comparable earnings per share nearly doubled from €0.04 to €0.07. The AI & Cloud segment booked €2.8 billion in orders, with revenues in that area more than doubling year over year.
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That momentum prompted Nokia to lift its full-year comparable operating profit guidance to a range of €2.1 billion to €2.6 billion. The company also unveiled what it calls the first commercial AI-RAN platform with Nvidia in July, built on Nvidia’s Aerial software and accelerated computing to boost capacity in existing 4G and 5G radio networks.
Institutional validation arrived in mid-August when Nvidia disclosed a $2.21 billion stake in Nokia via a Form 13F filing—a vote of confidence in the Finnish group’s networking technology for AI data centers. Independent recognition followed from Omdia, which ranked Nokia first in mobile core network portfolio competitiveness for the second consecutive year, with leadership across all seven assessed categories including AI and analytics.
A Stock in Two Minds
Friday’s session captured the tension. The shares closed at €8.84, down 3.3 percent on the day, though the secondary source’s slightly different closing figure of €8.87 with a 2.4 percent decline suggests intraday volatility around the reporting. Either way, the retreat has no single fresh catalyst—it reflects ongoing digestion of the already-announced China restructuring.
The longer-term picture remains firmly positive. The stock is up roughly 58-59 percent year to date and has gained about 20-21 percent over the past 30 days. Measured against its closing price twelve months ago, the advance approaches 140 percent.
Yet the distance from the June peak of €14.97—a 41 percent gap—serves as a reminder that the China drag and elevated share-price volatility continue to temper enthusiasm despite the operational strides in AI. Investors will get their next hard look at the numbers on October 21, when Nokia reports third-quarter results.
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