Nokia Stock Fails to Retake €10 Level Pre-Earnings as 5G Growth Fails to Offset Weak Profit Momentum
Nokia shares enter earnings week under pressure as investors question whether AI partnerships, 5G expansion, and restructuring efforts can deliver meaningful growth while traditional telecom markets continue weakening.
Quick overview
- Nokia shares are under pressure as investors doubt the effectiveness of its AI partnerships and 5G expansion amid declining traditional telecom markets.
- The upcoming earnings report is critical for assessing Nokia's transformation efforts and their impact on financial performance.
- Despite significant growth in AI and cloud sales, investors remain cautious due to the limited financial impact and ongoing weakness in legacy telecom operations.
- Nokia's strategic partnerships in defense and 5G have generated short-term optimism, but investors seek evidence of sustainable earnings growth.
Nokia shares enter earnings week under pressure as investors question whether AI partnerships, 5G expansion, and restructuring efforts can deliver meaningful growth while traditional telecom markets continue weakening.
Nokia Stock Slides Toward €9 as Earnings Expectations Come Under Pressure
Nokia shares remain under pressure heading into earnings week after the company’s recent recovery attempt lost momentum, highlighting continued investor uncertainty around its transformation strategy.
The Finnish telecommunications company briefly climbed back above the €11 level earlier this month, but the rally quickly faded as sellers returned. The stock fell sharply toward the €9 area, reaching €8.65 last week after a decline of around 19%, as investors reassessed whether Nokia’s long-term growth plans can offset weaker legacy operations.
Although Nokia has positioned itself around artificial intelligence, advanced networking, defence communications, and future 5G and 6G infrastructure, the market remains focused on one key question: when will these investments translate into stronger earnings growth?
For now, investors appear unwilling to assign a higher valuation based solely on future potential.
Earnings Report Becomes Critical Test for Nokia Recovery
Nokia’s upcoming quarterly results will provide an important test of whether the company’s transformation efforts are beginning to deliver measurable financial improvement.
Analyst consensus estimates suggest second-quarter profit represents approximately 16% of the company’s full-year earnings expectations, reaching the upper end of Nokia’s historical seasonal assumption range of 12%-16%.
However, this also raises the pressure on upcoming results.
Any weakness during the quarter could mean Nokia must generate a significantly stronger second half of the year to meet market expectations.
Revenue growth alone may not be enough to reassure investors. The focus will likely remain on margins, profitability, cost controls, and whether new growth areas are replacing weakness in traditional telecom businesses.
Currency movements are also providing limited support. With EUR/USD trading close to Nokia’s planning assumptions, foreign exchange is unlikely to provide a major earnings boost, leaving operational performance as the key driver.
Nokia Earnings Preview
- Optical & AI Momentum: Analysts will be monitoring whether demand for Nokia’s AI-optimized optical solutions can outpace headwinds like supply chain constraints.
- Telecom Spending: The broader industry remains in a cyclical trough for traditional 5G carrier investments, a structural pressure that recently dragged down competitors like Ericsson.
- Margins & Profitability: Management’s commentary on sequential net sales growth (previously targeted at 5-9%) and comparable operating margins will be vital to justifying the stock’s elevated 2026 valuation multiples.
- Patent Portfolio: Any updates on recurring licensing deals and patent monetization will serve as a stabilizing force for cash generation
AI and Cloud Growth Provides Hope, But Financial Impact Remains Limited
Nokia’s AI and cloud strategy remains one of the strongest parts of its future growth narrative.
The company reported significant momentum in AI-related and cloud-focused sales, with revenue from these areas increasing 49% in the first quarter and representing around 8% of group sales.
Orders from AI and cloud customers reached approximately €1 billion, suggesting growing demand for Nokia’s advanced networking solutions.
However, investors remain cautious.
The market has become increasingly selective toward companies announcing AI partnerships without demonstrating clear financial returns.
Nokia’s collaboration with NVIDIA and other technology partners could strengthen its position in intelligent network infrastructure, but investors want evidence that these initiatives can generate sustainable revenue growth and improved margins.
At present, the financial contribution remains too small to offset weakness elsewhere.
Defence and 5G Partnerships Offer Temporary Support
Recent partnerships have provided short-term optimism around Nokia’s strategic direction.
The company’s NestAI defence partnership generated interest after showing early operational progress in military communications and next-generation networking applications.
Nokia also expanded its relationship with Taiwan Mobile through a new agreement focused on upgrading 5G infrastructure.
The project includes Nokia’s AirScale hardware platform and AI-powered software designed to improve network efficiency, automate operations, and reduce energy consumption.
These developments strengthen Nokia’s long-term position in advanced connectivity markets.
However, neither announcement was enough to create lasting buying momentum in the stock.
Investors increasingly want proof that these agreements can translate into higher earnings rather than simply expanding Nokia’s list of strategic partnerships.
Legacy Telecom Weakness Continues to Weigh on Growth
One of Nokia’s biggest challenges remains declining demand across traditional telecommunications markets.
The company’s Fixed Networks division recently reported a 13% revenue decline as telecom operators reduced infrastructure spending and delayed investments.
While Nokia has shifted resources toward faster-growing areas such as optical networking, enterprise connectivity, cloud infrastructure, and software solutions, these businesses have not yet expanded quickly enough to compensate for weakness in older segments.
This imbalance has kept earnings growth below investor expectations.
The company’s transformation remains a long-term project, but shareholders are becoming increasingly impatient as they wait for stronger financial evidence.
Technical Outlook: Nokia Stock Tests Key Support
From a technical perspective, Nokia shares remain vulnerable after failing to maintain their recent recovery.
The stock’s decline has brought the 20-day simple moving average into focus, with the indicator currently around the €10 level.
A decisive break below this area could increase selling pressure and open the possibility of further declines.
The inability to hold the €11 recovery zone suggests buyers remain cautious, while sellers continue taking advantage of weak momentum.’
Nokia Chart Weekly – Breaking Below the 20 SMA Again
Nokia shares have been trading up since August last year, when the price was trading below €3.50, and in early June it reached €15. Moving averages have been acting as support during pullbacks, helping keep the trend bullish. We saw a dip below €7 in late March, but the sentiment improved, with last week’s earnings helping investors, and Nokia shares extended the upside to €15 with the help of the 20 daily SMA.
Expansion Plans Create New Execution Challenges
Nokia continues investing in future growth opportunities, including photonic chip testing and packaging operations in the United States.
The company is also integrating the acquisition of Infinera while restructuring non-core operations.
These moves could improve Nokia’s competitive position as demand increases for high-capacity networks supporting AI infrastructure and digital services.
However, the strategy also introduces additional risks.
Large investments, acquisition integration challenges, and uncertain customer adoption timelines could delay financial returns.
Investors are increasingly concerned that Nokia’s transformation may require more time and capital before delivering meaningful results.
Nokia Must Convert Strategy Into Earnings Growth
Despite ambitious plans, Nokia continues struggling to gain investor confidence.
The company has failed to fully participate in the broader technology market recovery, with investors remaining skeptical about whether AI investments, 5G expansion, and acquisitions can accelerate profitability.
For now, Nokia’s long-term strategy remains promising but unproven.
Until the company demonstrates stronger earnings growth, improved margins, and clear financial benefits from its transformation efforts, NOK shares may continue facing pressure despite its expanding presence in future technology markets.
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