Nokia’s €2.8 Billion AI Order Haul Meets a Harsh Reality: Chips Won’t Keep Up
Published on 07/26/2026 at 16:53 | Redaktion boerse-global.de
The paradox playing out at Nokia right now would baffle any investor who only glanced at the earnings release. Revenue climbed 8 percent to €4.82 billion. Comparable operating profit jumped 18 percent to €434 million. AI and cloud revenue more than doubled, now representing 9.3 percent of total sales. The company locked in €2.8 billion in AI-related orders. By any normal measure, this is a company firing on all cylinders.
Yet the stock closed Friday at €8.06, down 6.32 percent in a single session, and has shed 33.53 percent over the past 30 days. From its 52-week high of €14.97 in early June, the shares have lost nearly half their value. The disconnect between operational performance and market reception has a name: Justin Hotard’s warning that memory chips will remain scarce until 2027.
A Supply Squeeze That Hits the Whole Sector
This isn’t a Nokia-specific problem, and that’s what makes it so unsettling for shareholders. Rival Ericsson has already flagged rising costs tied to increasingly expensive AI memory chips, with its CFO openly acknowledging the pressure across the industry. The structural bottleneck threatens to slow the very AI infrastructure buildout that propelled telecom equipment stocks this year.
The sell-off, then, isn’t a vote of no confidence in Nokia’s management. It’s a recognition that explosive demand is running headlong into constrained supply chains. The market has shifted its focus from the robust order pipeline to input costs and the question of how long margins can withstand the squeeze.
Should investors sell immediately? Or is it worth buying Nokia?
The Cost of Transformation
A quieter drag compounds the chip anxiety: Nokia’s own restructuring bill. The reported operating margin fell 430 basis points to minus 1.0 percent as the company accelerated its reorganization. Net income shrank from €90 million to a wafer-thin €2 million. Nokia is front-loading the pain of its transformation, asking investors to look past a reported operating loss and focus instead on the improved adjusted profit picture. That requires a leap of faith the market isn’t currently willing to make.
The cash situation adds another layer of concern. Reports of negative free cash flow and restructuring costs rising faster than expected have reminded the market that building the “AI era” is expensive. Management acknowledged that new orders are “lumpy,” with roughly half not converting to revenue for at least a year. In a stock whose annualized volatility has hit 66.88 percent, patience is in short supply.
The €7.84 Line in the Sand
The technical picture tells a story of its own. The 14-day RSI sits at 29.5, deep in oversold territory — a level that has historically preceded stabilization attempts in earlier phases of this year. But the stock now trades just 2.84 percent above its 200-day moving average of €7.84, a level analysts view as critical given the current selling pressure.
That moving average is the last line of defense for the bull case. If it breaks, the path to the 52-week low of €3.45 suddenly becomes a realistic scenario rather than a theoretical one. If it holds, the oversold conditions could spark a recovery. Either way, the transition from hype to execution is about to be tested in earnest.
Nokia at a turning point? This analysis reveals what investors need to know now.
What Comes Next
Despite the carnage, Nokia remains up 44.19 percent year-to-date. The current slide is a correction within an extraordinary run, not necessarily a trend reversal. The company itself expects operating profit above the midpoint of its annual guidance, with third-quarter results at a similar level to the second quarter.
That provides an anchor, but it doesn’t change the fundamental shift in market attention: away from the robust order intake and toward the supply chain constraints that threaten to cap the upside. For a stock that became a symbol of Europe’s AI infrastructure boom, the tension between surging demand and limited chip availability is now the defining narrative. Whether the oversold conditions produce a floor or just a pause in the correction depends less on Nokia’s own performance — which has been strong — and more on how quickly the global semiconductor supply chain can catch up to the appetite it helped create.
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