Will the €10 Support Hold for Nokia Stock as Investors Remain Sceptic of AI and 6G Plans?
Nokia shares remain under pressure as investors weigh the company's long-term AI ambitions against slowing legacy businesses, execution risks, and a lack of meaningful earnings acceleration.
Quick overview
- Nokia shares are under pressure as investors question the company's ability to deliver consistent earnings growth amid slowing legacy businesses and execution risks.
- The stock recently fell toward the €10 support level, with concerns about investor confidence and the inability to sustain price rebounds.
- Despite significant investments in AI and advanced technologies, investor sentiment remains cautious due to the long timeline for potential earnings contributions.
- Nokia's legacy operations continue to decline, impacting overall profitability and making it difficult for the company to capitalize on broader market recovery.
Nokia shares remain under pressure as investors weigh the company’s long-term AI ambitions against slowing legacy businesses, execution risks, and a lack of meaningful earnings acceleration.
Nokia Continues to Lag Despite Technology Investment
Shares of Nokia continue to underperform broader equity markets as investors increasingly question whether the company’s ambitious transformation strategy can generate the consistent earnings growth needed to justify higher valuations.
The stock fell toward the €10.10 region during the week, approaching its lowest level in nearly two months and placing the psychologically important €10 support level firmly in focus. Although buyers briefly pushed shares back above €11 during Thursday’s session, renewed selling pressure emerged before the end of the week, sending the stock back below that threshold.
The inability to sustain rebounds has reinforced concerns that investor confidence remains fragile.
Technical Support Faces a Critical Test
For technical traders, the €10 level represents a significant support zone that could determine the stock’s medium-term direction.
A successful defense of this level could encourage bargain hunting and potentially trigger a recovery toward previous resistance areas. However, a decisive break lower would likely reinforce the existing bearish trend and could invite additional momentum-driven selling.
After previously rallying toward €15 earlier this year, Nokia’s reversal highlights how quickly sentiment has deteriorated as investors shifted their attention away from long-term promises and toward near-term earnings delivery.
Given the stock’s recent trading pattern, caution remains warranted until a clearer trend emerges.
Treasury Share Distribution Keeps Share Count Stable
Nokia recently distributed approximately 43.55 million treasury shares to employees as part of its long-term equity incentive programs.
Based on recent market prices, the allocation carried a value of roughly €485 million. Because the shares were already held in treasury rather than newly issued, the transaction did not increase the overall share count or dilute existing shareholders.
While the move aligns employee incentives with shareholder interests, it had little impact on investor sentiment, with markets remaining focused on earnings prospects and operational performance.
AI Transformation Still Lacks Financial Proof
Artificial intelligence remains central to Nokia’s long-term strategy.
The company continues investing heavily in AI-enabled telecommunications infrastructure, including its partnership with NVIDIA aimed at integrating advanced processors into future 5G and 6G network architectures.
Nokia is also expanding its AI-powered network automation capabilities in an effort to improve network efficiency and strengthen its position in next-generation communications infrastructure.
Despite the strategic importance of these initiatives, investors appear increasingly reluctant to reward projects that may require years before producing material earnings contributions.
The market’s focus has shifted from announcements and partnerships toward measurable financial returns.
Legacy Businesses Continue to Weigh on Performance
One of the biggest challenges facing Nokia remains the ongoing weakness in its traditional telecommunications operations.
The company’s Fixed Networks division recently reported a 13% decline in revenue, reflecting subdued carrier spending and softer demand for legacy infrastructure solutions.
Management continues redirecting investment toward higher-growth segments including optical networking, enterprise services and cloud connectivity. However, these businesses have not yet grown sufficiently to offset declines elsewhere in the portfolio.
As a result, profitability improvements have remained slower than many investors had hoped.
Nokia Chart Weekly – Heading to 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.
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. However, the €10 support zone held this week, but we’ll see if sellers will have another go at it next week or if this will be the start of the rebound.
Expansion Efforts Increase Execution Risks
Nokia’s transformation strategy extends beyond software and AI into advanced hardware technologies.
The company is investing in photonic chip testing and packaging capabilities in the United States while simultaneously integrating the acquisition of Infinera and restructuring non-core assets.
Although these initiatives could strengthen Nokia’s long-term competitive position, they also introduce significant execution risks. Large capital requirements, uncertain customer adoption rates and lengthy commercialization timelines increase the possibility of delays before investments translate into stronger earnings.
Broader Market Recovery Leaves Nokia Behind
Perhaps the most concerning signal for investors has been Nokia’s inability to participate in broader market strength.
Improving global risk sentiment, easing geopolitical tensions and stronger technology sector performance have lifted many large-cap technology stocks in recent months. Nokia, however, has remained largely absent from that recovery.
The stock’s inability to benefit from a favorable backdrop suggests institutional investors remain unconvinced that the current earnings trajectory supports higher valuations.
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 Cautiously Balanced
Nokia continues to possess attractive long-term opportunities in AI infrastructure, optical networking and next-generation communications technologies. Its strategic repositioning could ultimately create a more diversified and higher-margin business model.
However, the path toward that outcome remains uncertain.
Persistent weakness in legacy operations, integration risks, elevated investment spending and the long timeline associated with AI monetization continue to weigh on sentiment. Until management demonstrates that these investments can consistently translate into stronger earnings growth, investors may continue approaching the shares with caution, particularly as the stock trades close to the critical €10 support level.
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