Nokia Stock Return to €10, Risking Breakdown Despite New Defence and 5G Partnerships as Legacy Declines Weigh
Nokia shares remain under pressure as investors increasingly question whether AI partnerships, 5G expansion, and ambitious transformation plans can offset slowing legacy businesses and a disappointing pace of earnings growth.
Quick overview
- Nokia shares are under pressure as investors doubt the effectiveness of AI partnerships and 5G expansion in offsetting declines in legacy businesses.
- Despite recent operational successes, including a defense partnership and a deal with Taiwan Mobile, the stock has struggled to maintain gains.
- Nokia's ongoing investments in AI and telecommunications infrastructure have yet to yield significant financial returns, leading to investor skepticism.
- The company's legacy operations continue to hinder growth, with recent revenue declines in traditional sectors overshadowing progress in newer markets.
Nokia shares remain under pressure as investors increasingly question whether AI partnerships, 5G expansion, and ambitious transformation plans can offset slowing legacy businesses and a disappointing pace of earnings growth.
Nokia Stock Slides Back Toward €10 as Recovery Attempt Fails
Nokia shares continue to lag broader technology markets after last week’s rebound above €11 quickly faded, highlighting the fragile confidence surrounding the Finnish telecommunications giant.
The stock briefly recovered following a strong Thursday session but renewed selling pressure emerged before the week ended, pushing shares back toward the €10 region and bringing the important psychological support level back into focus.
The inability to sustain gains has reinforced concerns that investors remain unconvinced by Nokia’s long-term growth story despite a series of strategic announcements and technology investments.
While many technology stocks have benefited from improving market sentiment and enthusiasm surrounding artificial intelligence, Nokia has largely remained on the sidelines.
Defence and 5G Partnerships Provide Only Temporary Relief
Part of last week’s rally was driven by early operational results from Nokia’s NestAI defence partnership, which generated optimism around the company’s growing presence in military communications and next-generation networking technologies.
Investor sentiment also improved after Nokia announced an expansion of its long-standing relationship with Taiwan Mobile through a new agreement focused on upgrading the operator’s fifth-generation network infrastructure.
Under the agreement, Nokia will provide its AirScale hardware platform alongside AI-enabled software designed to improve network efficiency, automate operations, and reduce energy consumption.
The project is expected to strengthen Taiwan Mobile’s ability to handle rising data traffic while preparing its infrastructure for future digital services and next-generation connectivity demands.
Despite the positive developments, neither announcement proved sufficient to generate a lasting recovery in the share price.
AI Strategy Continues to Lack Financial Validation
Artificial intelligence remains central to Nokia’s long-term transformation strategy.
The company continues investing heavily in AI-enabled telecommunications infrastructure while expanding partnerships designed to position Nokia at the center of future 5G and 6G network development.
Its collaboration with NVIDIA aims to integrate advanced processors and AI capabilities into future communications infrastructure, while internal investments continue to focus on automation and intelligent network management solutions.
However, investors are becoming increasingly reluctant to reward projects that may take years to generate meaningful financial returns.
The market’s focus has shifted away from announcements and partnerships toward measurable revenue growth, margin expansion, and earnings acceleration.
So far, Nokia has struggled to provide that proof.
Legacy Businesses Continue to Drag on Growth
One of Nokia’s biggest challenges remains weakness across its traditional telecommunications operations.
The company’s Fixed Networks division recently reported a 13% decline in revenue as telecommunications carriers reduced infrastructure spending and demand for older networking solutions softened.
Although management has redirected investment toward faster-growing businesses such as optical networking, enterprise connectivity, cloud infrastructure, and software services, those segments have not yet grown quickly enough to offset declines elsewhere.
As a result, earnings growth has remained slower than many shareholders expected earlier in the year.
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 with the decline being consistent and the 20 SMA in gray is under attack now. It stands at €10 and will open the door for further losses if it gets broken.
Expansion Plans Increase Execution Risks
Nokia’s transformation strategy extends beyond software and AI investments.
The company is expanding photonic chip testing and packaging operations in the United States while integrating the acquisition of Infinera and restructuring non-core assets.
These initiatives could strengthen Nokia’s long-term competitive position, particularly as demand grows for high-capacity data networks and AI infrastructure.
However, they also introduce significant execution risks.
Large capital requirements, uncertain customer adoption timelines, and the complexity of integrating acquisitions create the possibility that returns may take longer to materialize than investors currently expect.
Share Distribution Has Little Market Impact
Nokia recently distributed approximately 43.55 million treasury shares to employees through its long-term incentive programs.
The shares were valued at roughly €485 million based on recent market prices.
Because the stock came from existing treasury holdings rather than new issuance, the move did not increase the company’s overall share count or dilute existing shareholders.
While the programme helps align employee incentives with shareholder interests, investors largely ignored the announcement and remained focused on the company’s earnings outlook.
Market Recovery Leaves Nokia Behind
Perhaps the most worrying signal for investors is Nokia’s inability to participate in the broader technology rally.
Improving global risk sentiment, easing geopolitical tensions, and stronger performance across major technology companies have lifted much of the sector over recent months.
Nokia, however, has failed to benefit from that environment.
The stock’s repeated inability to hold gains suggests institutional investors remain skeptical that the company’s current earnings trajectory can justify higher valuations.
Until Nokia can demonstrate that its AI investments, acquisitions, and network expansion projects are translating into stronger profitability and sustainable growth, the shares may continue struggling to attract renewed buying interest despite the company’s ambitious long-term strategy.
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
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