Nokia’s AI Narrative Faces Its Moment of Truth as Q2 Earnings Arrive
Published on 07/22/2026 at 14:02 | Redaktion boerse-global.de
Nokia shares staged a sharp 5.65% rebound on Tuesday, closing at €9.39, just hours before the Finnish telecom equipment maker is due to release its second-quarter and first-half 2026 results. The bounce offered a brief reprieve from a brutal stretch that saw the stock shed nearly a quarter of its value in recent weeks, but the real test begins Wednesday morning when investors get their first look at whether the company’s pivot toward software and artificial intelligence is actually translating into revenue.
The pre-earnings rally, however, was not enough to erase the deeper damage. Nokia’s stock remains 37.26% below its 52-week high of €14.97, reached on June 3, and has fallen 27.58% over the past 30 days. Even after Tuesday’s jump, the shares are trading at €9.39 — still 38.73% off that June peak. The relative strength index sits at 37.5, indicating the stock has cooled significantly but has not yet entered oversold territory.
Analyst Upgrade Adds to the Pre-Earnings Buzz
Adding to the positive sentiment, SEB Equities upgraded Nokia from “Hold” to “Buy” on Tuesday, setting a price target of €12.00. The analysts argued that Nokia’s increasing focus on software-based and AI-optimized network technology should help insulate the company from the prolonged downturn in traditional telecom hardware spending. The upgrade comes after a correction that has left the stock’s 30-day annualized volatility at 66.65%, suggesting large swings are likely once the earnings are released.
Despite the recent weakness, Nokia’s long-term trend remains intact. The stock is still trading 20.87% above its 200-day moving average of €7.77, a sign of how dramatically the shares repriced over the past year — the stock is up 64.08% on a 12-month basis. The 200-day average itself has risen from €7.80, reflecting the sustained upward momentum that preceded the June sell-off.
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What the Market Expects from Q2
Nokia will report its results on Wednesday, July 23, before the Helsinki market opens, followed by an analyst webcast in the afternoon. The consensus estimates paint a picture of a company that should be delivering on its transformation:
- Revenue: The Zacks consensus calls for roughly $5.59 billion, or approximately €5.15 billion, representing a significant jump from the €4.55 billion reported in the second quarter of 2025.
- Earnings per share: Adjusted EPS is expected at around $0.07, compared to €0.04 in adjusted earnings and €0.02 in reported diluted EPS a year earlier.
The market is pricing in that Nokia’s second-quarter results should account for roughly 16% of the full-year profit forecast — at the top end of the historical seasonal range of 12% to 16% that the company typically achieves in Q2. That elevated expectation raises the stakes considerably. A miss would likely be interpreted as a warning signal for the remainder of the year.
Commercial Wins Bolster the Software Story
Nokia has been quietly stacking up commercial victories that support its narrative of becoming a software-driven, AI-native infrastructure company. On July 21, the company announced the successful completion of a major project with Jazz, Pakistan’s largest mobile operator. Nokia replaced Jazz’s legacy systems with a cloud-native architecture based on its Subscriber Data Layer, virtualizing subscriber data management without disrupting live operations. The project serves as a key reference case for Nokia’s “Software Speed” strategy, demonstrating that network capacity can be expanded without expensive new hardware.
The company has also been active elsewhere. Nokia signed a 5G expansion agreement with Taiwan Mobile to accelerate the deployment of AI-native mobile networks in Taiwan. On the defense front, Nokia Defense deepened its partnership with NestAI to deliver AI-powered capabilities for secure, NATO-compatible networks. These deals, combined with the recently launched commercial AI-RAN platform developed jointly with Nvidia, form the backbone of Nokia’s argument that it is no longer just a hardware vendor.
The Core Tension: When Does AI Revenue Materialize?
Yet the market remains skeptical. The fundamental conflict driving Nokia’s stock volatility is straightforward: the company is positioning itself around artificial intelligence, modern networking, defense communications, and future 5G and 6G infrastructure, but investors are not yet convinced that these investments are translating into stronger profit growth. The stock briefly climbed back above €11 earlier this month, only to see sellers quickly reassert control, pushing it down to €8.65 last week — a drop of roughly 19% in a matter of days.
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Investors appear unwilling to pay a premium for future potential alone. The key question for Wednesday’s report is less about top-line revenue and more about operational execution. Management’s guidance on sequential net sales growth — currently targeted at 5% to 9% — and the trajectory of comparable operating margins will be the critical metrics. Both need to justify the elevated valuation multiples that Nokia’s stock commands for 2026.
Currency Tailwinds Fade, Operating Performance Takes Center Stage
Currency effects are unlikely to provide much cover this quarter. The euro-dollar exchange rate is trading close to Nokia’s planning assumptions, leaving operating performance as the sole driver of the numbers. That puts additional pressure on management to demonstrate that the margin improvements seen in recent quarters are sustainable and that the AI-driven revaluation of the stock can continue.
With annualized 30-day volatility at 68%, the stage is set for a significant move in either direction. Nokia’s long-term trend remains positive — the stock is still well above its 200-day moving average — but the short-term picture is fragile. The earnings report will determine whether Tuesday’s bounce was the start of a genuine recovery or just a brief pause before the selling resumes.
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