Nokia Stock Eyeing Key €10 Level as investors Dismiss AI Vision and Legacy Business Weakness Weigh

Quick overview

Performance across the Nasdaq Composite and STOXX Europe 600 highlights improving global equity sentiment, yet Nokia shares continue to underperform as investors question whether its AI transformation can deliver consistent earnings growth.

Nokia Slides Toward Critical Technical Support

Shares of Nokia remained under heavy selling pressure last week, extending their recent decline toward the €10.50 area and approaching their lowest level in nearly two months. The weakness has brought the stock close to the psychologically important €10 support level, a zone that many technical traders consider the next major downside trigger.

The recent selloff reflects growing skepticism that Nokia’s ambitious transformation strategy is translating into sustainable financial performance. While the company continues to promote its long-term growth initiatives, investors are increasingly demanding tangible earnings improvements rather than strategic promises.

A decisive break below €10 would likely reinforce the bearish technical outlook and could invite additional selling as momentum traders target lower support levels.

AI Strategy Struggles to Convince Investors

Artificial intelligence remains central to Nokia’s long-term vision. The company has invested heavily in positioning itself as a leading supplier of AI-enabled telecommunications infrastructure, highlighted by its roughly $1 billion partnership with Nvidia.

The collaboration focuses on integrating Nvidia’s advanced processors into Nokia’s 5G radio access networks while preparing next-generation 6G infrastructure capable of using machine learning to optimize network performance.

Although strategically important, the partnership has failed to generate lasting enthusiasm in the stock market. Investors increasingly appear unwilling to assign premium valuations to AI projects that may take years to produce meaningful earnings.

Similarly, Nokia’s expansion of its AI-powered network automation platform has generated limited investor interest, suggesting markets now require measurable revenue growth rather than technology announcements alone.

Legacy Businesses Continue to Pressure Results

One of the biggest obstacles facing Nokia remains the continued weakness in its traditional telecommunications operations.

The company’s Fixed Networks division reported a 13% decline in revenue during its latest reporting period, highlighting ongoing softness in carrier spending and traditional infrastructure investments. While management continues shifting resources toward optical networking, enterprise services, cloud infrastructure and AI-driven networking solutions, these faster-growing segments have not yet fully compensated for declining legacy businesses.

This imbalance continues to weigh on profitability and has become a primary reason investors remain cautious despite the company’s attractive long-term strategy.

Expansion Plans Increase Execution Risks

Beyond AI software, Nokia is investing aggressively in advanced networking technologies.

The company is expanding photonic chip testing and packaging capabilities in the United States to capture growing demand from hyperscale data centers supporting increasingly complex computing workloads. Optical networking is widely expected to become an essential component of future high-speed data transmission infrastructure.

However, these investments also introduce considerable execution risk. Large capital commitments, lengthy commercialization timelines and uncertain customer adoption create questions regarding future returns.

At the same time, Nokia continues integrating its acquisition of Infinera while restructuring non-core assets, adding another layer of operational complexity. Investors remain concerned that these simultaneous initiatives could delay the company’s ability to deliver stronger earnings.

Market Strength Leaves Nokia Behind

Perhaps the most concerning signal for shareholders is Nokia’s inability to participate in the broader recovery across global equity markets.

Improving investor sentiment, easing geopolitical tensions and stronger technology sector performance have supported many large-cap stocks in recent weeks. Nokia, however, has largely failed to benefit from this favorable backdrop.

After briefly rallying toward €15 earlier this year, the stock reversed sharply as profit-taking accelerated. The inability to sustain gains during a supportive market environment suggests institutional investors remain unconvinced that Nokia’s earnings outlook justifies higher valuations.

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. In early July the 50 SMA in yellow came under threat and was broken, which opens the door for the €10 level 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 Cautious

Nokia continues to possess significant long-term opportunities in AI-enabled networking, cloud connectivity, optical infrastructure and next-generation telecommunications. Its strategic repositioning could ultimately transform the company into a more diversified technology leader.

Nevertheless, investors appear increasingly focused on execution rather than vision. Persistent weakness in legacy operations, integration challenges following the Infinera acquisition, elevated capital spending and uncertainty surrounding the timing of AI monetization continue to overshadow the company’s long-term potential.

Until Nokia demonstrates that its newer growth businesses can consistently offset declines in its traditional operations and generate stronger earnings, the shares are likely to remain vulnerable to further downside, with the €10 level emerging as the market’s next critical technical test.

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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