Nokia's €100 Million Defense Push Can't Mask the Stock's Steep Slide From June Peaks
Published on 07/09/2026 at 14:07 | Redaktion boerse-global.de
Nokia’s pivot toward military technology took a tangible step forward this week, but the share price remains deeply mired in a correction that has erased nearly a third of its value from the June highs. The Finnish telecom-equipment maker, together with local partner NestAI, launched a suite of AI-driven defence systems on Thursday, prompting a 3.08% bounce in the stock to €10.72. Yet that single-day gain barely dented a slide that has seen the equity drop 13.3% over the past 30 days and sit roughly 28% below its 2024 peak of €14.97, set on 3 June.
The juxtaposition underscores a widening gap between the company’s long-term ambitions and the immediate headwinds battering its core telecoms business. Nokia’s defence push, seeded with a €100 million investment in NestAI — backed jointly by the state fund Tesi last November — is now operational. The partners are fusing artificial intelligence, 5G connectivity and sensor networks to create communications systems designed for contested battlefields where jammers and drone attacks can cripple conventional radio links. By embedding Nokia’s radio-planning models into NestAI’s software, troops can patch signal gaps during live operations, while Nokia’s early-warning apparatus is being integrated with NestAI’s detection gear to extend threat visibility across wider areas.
The move is part of a deliberate strategy to turn Nokia’s defence unit into a meaningful revenue stream, capitalising on the rapid build-up across European militaries and the demanding interoperability standards of NATO. Management will need to prove the partnerships are already generating real sales when second-quarter results land later this month. Until then, the direction of the stock hangs on contract announcements and project updates — and right now, the news flow from the telecoms side is weighing heavily.
Nokia’s ADRs have been among the weakest performers in the European basket of US-listed securities, dragged down by reports of softening demand for telecom infrastructure and persistent margin pressure. The weakness has persisted even on days when the broader market rallied. On 2 July, for instance, Nokia was one of the few continental European ADRs to close lower despite a widespread advance. From a closing peak of around $14.82 on 15 June, the ADR fell to $11.85 by 7 July — a decline of roughly 20% carved out by a series of lower highs.
Should investors sell immediately? Or is it worth buying Nokia?
The technical picture reflects the strain. Nokia trades 13.9% below its 50-day moving average of €12.08, which now acts as stiff resistance. The 14-day relative strength index sits at 38.4, pushing into oversold territory without yet signalling a turnaround. Annualised 30-day volatility stands at 73%, a reminder of the violent swings that have characterised recent trading.
Analysts, however, have not flinched. Danske Bank upgraded Nokia from Hold to Buy on 1 July with a €14 target just as the stock began its latest leg lower. Another house followed shortly after, lifting its price target to €15.60 and reiterating a Buy rating, citing Nokia’s improving positioning in AI and cloud infrastructure. The bullish consensus rests on a stream of partnerships that extend well beyond defence. Nokia is deepening its relationship with Google Cloud, embedding Gemini-based AI agents into its Assurance Center and planning a SaaS launch on the Google Cloud Marketplace for September. Its collaboration with Amazon Web Services is also accelerating: the Autonomous Networks Fabric — a platform for level-4 autonomous networks — is expected to be available on AWS later this year.
These growth initiatives, combined with the defence foray, paint a narrative at odds with the share price. Nokia generated roughly $19.2 billion in revenue, giving it a price-to-sales multiple of 1.56 that is modest for a large-cap equipment maker. The price-to-earnings ratio of 46, though, is lofty for a business with the growth rate of a mature telecoms supplier. That tension — a rich multiple against stagnant organic demand — explains why short-term traders have been stepping aside. The balance sheet provides a cushion: total assets of $37.6 billion against equity of $21 billion.
Nokia at a turning point? This analysis reveals what investors need to know now.
On a year-to-date basis, Nokia is still up 87% to 93%, depending on the exact measurement date — a fact that tempers the recent drawdown. The stock remains 38.6% above its 200-day moving average, indicating the long-term uptrend from the first half is technically intact. Whether the current pullback stabilises or deepens will likely hinge on whether the next batch of earnings can show that the AI, cloud and defence bets are beginning to translate into hard profit growth rather than just bullish analyst projections.
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