Will Nokia Slip Below $10 as the Technical Breakdown and $1B Nvidia AI Bet Worries Investors?

Quick overview

Nokia’s recent decline is a reflection of growing investor pessimism over its AI aspirations, enduring legacy weakness, and growing anxiety that its transformation story is not yet converting into stable earnings.

Renewed Selling Pressure Tests Key Support Levels

Nokia Corporation came under renewed pressure late last week and extended losses into Monday, sliding toward the $10.70 area and approaching its lowest level in nearly two months. The move brings the stock dangerously close to a key technical support zone, with traders increasingly watching the $10 level as the next major downside trigger.

A decisive break below this threshold would likely open the door to further downside, reinforcing concerns that recent weakness is not just a temporary pullback but part of a broader sentiment shift. Despite occasional intraday stabilisation attempts, buyers have struggled to regain control as momentum continues to drift lower.

The latest decline highlights a growing disconnect between Nokia’s long-term transformation narrative and short-term investor confidence.

AI Narrative Fails to Sustain Market Enthusiasm

Nokia has attempted to reposition itself as a key player in artificial intelligence-driven telecom infrastructure, most notably through a high-profile partnership with Nvidia valued at roughly $1 billion. The collaboration focuses on developing AI-enabled radio access networks and next-generation 6G infrastructure, integrating Nvidia processors into Nokia’s 5G systems to optimise network performance using machine learning.

While strategically significant, the market response has been notably restrained. Investors appear increasingly hesitant to reward long-dated technology bets without visible near-term earnings contributions. The initial optimism surrounding AI-related announcements has faded, replaced by questions about timing, monetisation, and return on investment.

A recent expansion of Nokia’s AI-powered network automation platform also failed to generate meaningful upward momentum, reinforcing concerns that announcements alone are no longer sufficient to drive valuation support.

Broader Market Strength Fails to Lift Sentiment

The weakness in Nokia shares has been particularly striking given broader improvements in global equity markets. Risk appetite improved following easing geopolitical tensions, and several technology stocks participated in the recovery. Nokia, however, remained notably absent from the rally.

After briefly climbing toward $15 earlier in the month, the stock reversed sharply as profit-taking intensified. The inability to sustain gains in a supportive market environment suggests that investor conviction in Nokia’s near-term earnings trajectory remains fragile.

Market behaviour increasingly reflects a preference for companies with clearer cash flow visibility, while penalising firms undergoing complex structural transitions.

Legacy Business Declines Continue to Weigh on Results

Despite progress in repositioning its strategy, legacy operations continue to act as a drag on performance.

Revenue in Nokia’s Fixed Networks division fell by 13% in the most recent reporting period, underscoring persistent weakness in traditional telecommunications infrastructure markets. Demand from carrier customers remains subdued, limiting growth in segments that historically formed the backbone of Nokia’s revenue base.

Management has been redirecting resources toward higher-growth areas such as optical networking, enterprise solutions, and cloud connectivity. However, the pace of this transition remains a central concern for investors, particularly as legacy declines continue to offset gains elsewhere in the business.

This structural imbalance has become one of the key factors weighing on valuation sentiment.

Expansion Bets Raise Execution Risk Concerns

Nokia’s broader transformation strategy includes several ambitious initiatives aimed at capturing growth in AI infrastructure and advanced networking.

The company is expanding its photonic chip testing and packaging capabilities in the United States, a move aligned with rising demand from hyperscale data centres building AI workloads. Photonic technology is expected to play a central role in next-generation data transmission systems, and Nokia is positioning itself early in this cycle.

However, investors remain cautious about execution. Large-scale infrastructure investments, complex integrations, and shifting market demand introduce significant uncertainty around timing and profitability.

The integration of Infinera and restructuring of non-core assets add further operational complexity, increasing the risk that transformation efforts may take longer than expected to translate into financial results.

Nokia Chart Daily – The 50 SMA Has Been Broken

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. However we saw a pullback and the 20 SMA in gray was broken which turned into resistance after the stock climbed in the last three days and rejected the price in June. Today the 50 SMA in yellow came under threat and was pierced, but eventually sentiment improved late in the day and Nokia stock closed right at the 50 SMA. If this moving average gets broken, then the $10 level comes next and if that fails to hold too, Nokia might fall under $10.

Valuation Reset Fears Intensify

Following a strong rally earlier in the year, Nokia now faces growing valuation pressure as expectations around AI-driven growth come under scrutiny. Investors are increasingly questioning whether the optimism embedded in the stock price adequately reflects execution challenges and cyclical weakness in legacy segments.

As sentiment cools, the market is becoming less forgiving of companies whose valuations depend heavily on future growth assumptions rather than current earnings momentum. In this environment, Nokia’s transition story is being tested not on ambition, but on delivery—and so far, that gap remains difficult to close.

Nokia Q1 2026 Earnings Highlights

Operating Profit Beat:

• Comparable operating profit came in at €281 million
• Up 54% year-over-year, beating the €250 million consensus

Revenue Growth:

• Total net sales reached €4.5 billion
• Representing a 4% annual increase
• Reported revenue of $5.27 billion, well above the $4.59 billion forecast

Earnings Per Share:

• EPS came in at $0.06, matching expectations
• Cloud and Tech Segment Driving Growth
• Revenue from technology and cloud customers surged 49%
• Nokia secured €1 billion in new cloud contracts during the quarter
• Book-to-bill ratio exceeded 1.0, signaling strong future demand

This highlights a clear shift toward higher-growth, higher-margin segments, particularly cloud infrastructure and enterprise solutions.

Key Takeaways

• Strong profit growth outpaced revenue, indicating improved margins
• Cloud momentum is becoming a core driver of performance
• Solid order intake and backlog support forward visibility

Outlook Remains Challenging

Nokia remains well positioned to benefit from long-term growth in cloud networking, optical connectivity, and AI-enabled infrastructure. Its strategic transformation has the potential to reshape the company into a more diversified and higher-margin technology provider.

However, recent trading suggests investors are becoming increasingly impatient. Weakness in legacy operations, ambitious capital investments, integration risks, and elevated valuation expectations have combined to create a more difficult environment for the stock.

Until Nokia demonstrates that its expanding AI and networking businesses can consistently generate enough growth to offset declines in its traditional operations, shares are likely to remain vulnerable to further volatility and renewed bouts of selling despite the company’s promising long-term strategic direction.

ABOUT THE AUTHOR See More

Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

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