Nokia’s $1 Billion Nvidia Pact Faces a Reality Check as Analysts Split on the Stock
29.06.2026 - 19:01:24 | boerse-global.de
The Finnish telecom gear maker is charging hard into artificial intelligence, but the market is not yet convinced the shares deserve their 103% year-to-date surge. A fresh wave of analyst commentary — both cautious and conflicted — has put Nokia’s momentum under a microscope just weeks before its second-quarter earnings release on July 23.
Barclays stays firmly on the sidelines. Analyst Simon Coles reaffirmed an “Underweight” rating on the stock and lifted his price target only modestly, from €8.00 to €8.50. That forecast sits more than 25% below the current trading level. Coles worries the broader semiconductor and equipment cycle is turning, and he prefers pure plays such as ASML, ASM International and TSMC over Nokia’s hybrid telecom-and-networking model.
Handelsbanken Capital Markets offers a more nuanced take. The Swedish bank downgraded Nokia from “Buy” to “Hold” but simultaneously raised its price target from €10.20 to €12.00. The analysts argue the stock now trades close to fair value after its blistering rally, with their cash-flow model showing limited upside from here.
The mixed signals left Nokia shares wobbling. On Monday the stock slipped 1.22% to €11.30 (other sources quote €11.29), extending a cooling-off phase that has erased roughly 11% over the past month. The distance from the 52-week high hit in early June now stands at nearly 25%. Even so, the price remains comfortably above the 200-day moving average of €7.37, and the relative strength index at 42.4 points to neutral territory — neither overbought nor oversold. Annualized volatility, however, remains elevated at about 75%.
Should investors sell immediately? Or is it worth buying Nokia?
A Billion-Dollar Bet on AI Networks
The current turbulence follows a major strategic announcement. Nokia has struck a partnership with Nvidia valued at $1 billion to embed artificial intelligence directly into mobile network infrastructure. The goal is to create intelligent data-processing capabilities for modern data centers. The technology underpinning the deal was assembled through years of acquisition: the 2015 purchase of Alcatel-Lucent brought critical optical know-how, and the 2025 acquisition of Infinera deepened that expertise further.
These optical networks are becoming indispensable for linking AI data centers, and the broader market backdrop supports the strategy. Gartner projects global data-center spending will approach $788 billion in 2026, while IDC predicts the AI-infrastructure market could surpass the trillion-dollar mark by 2029. Nokia also sees cumulative 5G-infrastructure industry revenues exceeding $150 billion by 2027.
Strong Fundamentals, High Expectations
The analyst skepticism is not directed at Nokia’s operational performance. The first-quarter results were robust: revenue from AI and cloud customers jumped 49% on a currency-adjusted basis, the optical-networks segment grew by one-fifth, and comparable operating profit climbed 54% to €281 million. Management subsequently confirmed its full-year guidance and reiterated a 2026 operating-profit target of €2.0 billion to €2.5 billion.
Nokia at a turning point? This analysis reveals what investors need to know now.
Yet the market now demands proof that the order momentum can sustain the current valuation. Pure AI narrative no longer automatically lifts the stock. The upcoming second-quarter report on July 23 will be the next test — Nokia must demonstrate it can maintain the growth pace in its infrastructure business, especially as competition in the networking space intensifies. Until then, the stock remains locked in a period of price discovery, caught between a transformative Nvidia deal and the cold arithmetic of earnings multiples.
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Nokia Stock: New Analysis - 29 June
Fresh Nokia information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.
