Nokia’s AI Orders Are Piling Up — But the Cash Burn Is Raising Red Flags
Published on 07/28/2026 at 17:51 | Redaktion boerse-global.de
The disconnect between Nokia’s operational performance and its stock price has rarely been wider. The Finnish telecom equipment maker posted a second-quarter operating profit of €434 million on July 28, comfortably beating the €382 million consensus estimate. Yet the shares have been hammered, shedding 31.91% over the past 30 days to trade at €7.74 — a far cry from the 52-week high of €14.97.
The immediate trigger for the latest leg lower was a broad sell-off in Asian and US technology stocks, fueled by mounting concerns over the capital intensity of the artificial intelligence sector and intensifying competition from Chinese chipmakers like CXMT. But Nokia’s troubles run deeper than sector-wide jitters.
A €2.8 billion order book that can’t stop the bleeding
On the surface, Nokia’s bet on the “AI super-cycle” looks like a winner. Sales to AI and cloud customers doubled year-on-year in the second quarter, hitting €446 million — a 105% surge. The company secured new orders worth €2.8 billion in the segment, roughly 6.3 times its quarterly revenue from that business. A partnership with Nvidia is accelerating the pivot toward data-center infrastructure, promising a shift toward higher-margin, recurring revenue streams.
Should investors sell immediately? Or is it worth buying Nokia?
But the market is looking past the headline numbers. Nokia reported a net loss of €50 million for the quarter and a negative free cash flow of €732 million. Restructuring charges of €390 million are weighing on the balance sheet, and management has warned that DRAM memory shortages could constrain the industry through 2027. The result: a company sitting on a record order book that it cannot quickly convert into cash.
The cost of transformation is piling up
Nokia has penciled in roughly €800 million in restructuring and special charges for 2026, covering job cuts in Europe and the integration of a Chinese joint venture. Several divisions, including fixed wireless access and enterprise campus edge, have been reclassified as discontinued operations — a technical reorganization that adds further complexity to the outlook.
These moves are designed to sharpen the business model over the long term. In the short term, they are hammering sentiment. The stock now sits 48.28% below its 52-week high and is testing the 200-day moving average at €7.88 — a level that long-term investors often treat as a red line. The 14-day relative strength index has fallen to 28.4, deep in oversold territory, suggesting that selling pressure may be exhausting itself. But with annualized volatility at 67.33%, any recovery attempt is likely to be choppy.
The €7.88 line in the sand
Technically, the stock has decisively broken below its 50-day moving average of €11.49 and is clinging to the 200-day average. A break below €7.88 could open the door to a slide toward the year’s low of €3.45, particularly if the broader tech sell-off intensifies. Conversely, if the sector stabilizes, the wide gap between the current price and the 50-day average could attract buyers betting on a mean reversion.
The bull case rests on Nokia’s ability to turn its €2.8 billion order backlog into actual revenue and cash flow, despite the memory chip bottlenecks. The company has maintained its upgraded full-year guidance of €2.1 billion to €2.6 billion in operating profit. If it can stabilize cash flow in the second half, the argument goes, the current price near the 200-day average will look like a solid entry point in hindsight.
Nokia at a turning point? This analysis reveals what investors need to know now.
Insider buying offers a glimmer of confidence
One data point has caught the attention of market watchers: an insider recently purchased 165,293 Nokia shares. Such buying is rare and could signal that those closest to the business see value at current levels. Investors will be watching for repeat purchases in the weeks ahead.
For now, Nokia remains caught between a record order book and a cash-burning transformation. The next catalyst will be whether the company can convert those orders into margins — and whether the broader tech rout gives it a chance to prove it can decouple from the sector’s turbulence.
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