Nokia's AI-Network Surge Collides With a Brutal Reality Check
Published on 07/21/2026 at 03:22 | Redaktion boerse-global.de
Nokia's stock has lost nearly 40% of its value in less than two months, wiping out a significant chunk of a rally that had lifted the shares more than 60% over the past year. The sell-off, which dragged the price from a 52-week high of €14.97 on June 3 to around €8.86 in Monday's session, reflects a market that is growing skeptical about the Finnish network equipment maker's ability to deliver on an exceptionally ambitious second-half profit target — even as its core growth engines hum along.
That challenge will come into sharp focus on July 23, when Nokia reports second-quarter results. Analysts expect revenue of €4.822 billion and a comparable operating profit of €376 million, both improvements from the first quarter's €4.497 billion and €281 million. But the number that really matters is the one two quarters out: consensus estimates call for full-year profit of €1.70 billion, meaning Nokia must generate 72% of that total in the second half alone. The company's own guidance range of €2.0 billion to €2.5 billion in comparable operating profit leaves even less wiggle room if it wants to reach the upper half.
The ingredients for a strong finish are visibly in place. Revenue from AI and cloud applications jumped 49% in the first quarter, while the optical networks division expanded 20%. CEO Justin Hotard responded by raising the growth outlook for both the optical and IP networking units, betting that the buildout of data-center infrastructure and fiber networks will sustain momentum. The order book now draws nearly half its value from land-based projects, including 5G expansion and fixed-line broadband.
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That same concentration, however, is also a vulnerability. Analysts point out that Nokia's growing reliance on the land-based segment makes it more susceptible to demand shifts in a single market, even as the company's smaller marine business benefits from higher-margin service contracts. If the second-half profit catch-up stumbles, the debate over whether Nokia is putting too many eggs in one basket will only intensify.
The broader environment offers little shelter. Swedish rival Ericsson posted a 6% revenue drop in the second quarter and warned that rising costs from AI-related investments are squeezing margins. Meanwhile, technology stocks broadly have been under pressure: the Philadelphia Semiconductor Index (SOX) has fallen roughly 20% from its peak, entering bear territory amid worries that Chinese AI models such as Kimi K3 could compete with Western offerings. For Nokia, which positions itself as a supplier to AI infrastructure, the sell-off has compounded its own stock decline — even though the company's operational progress in that segment has been solid.
Thursday's report will test whether management can convince investors that the strong order pipeline from optical and IP networks will translate into the profit acceleration needed to hit the upper end of its guidance. If Hotard and his team deliver a credible blueprint for the second half, the recent slide could prove to be a painful but temporary correction. If not, the market's punishment may have further to go.
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