Nokia's Stock Rout and the Second-Half Profit Clue That Has Investors Spooked
Published on 07/21/2026 at 05:13 | Redaktion boerse-global.de
Nokia’s shares have been hammered into technically oversold territory ahead of Thursday’s second-quarter earnings release, yet the selloff may have less to do with the immediate numbers than with the staggering profit burden the Finnish network equipment maker must shoulder in the second half. After closing at €8.86 on Monday — a 40.8% plunge from the June 3 high of €14.97 — the stock’s relative strength index has sunk to 31.4, typically a signal that a bounce could be imminent. But the fundamental picture offers little comfort: analysts expect the company to generate 72% of its full-year profit in the final two quarters, an unusually heavy lift that leaves almost no room for disappointment.
The consensus for the Q2 report, due before the Finnish market opens on July 23, calls for comparable operating profit of €376 million on revenue of €4.822 billion. By another measure, earnings per share are pegged at $0.07. The real test, however, lies in the trajectory. Nokia itself maintains guidance for full-year comparable operating profit of €2.0 billion to €2.5 billion, yet the analyst consensus — depending on the metric used — paints a more sobering picture. One widely cited calculation puts full-year operating profit at just €1.70 billion, meaning the second half must deliver more than €1.2 billion. A separate estimate suggests the Q2 profit accounts for only 16% of the annual EPS forecast, reinforcing the same message: the back half is everything.
The company can point to real traction in its AI-focused segments. In the first quarter, revenue from AI and cloud applications jumped 49%, while optical networks grew 20%, with orders in that division reaching roughly €1 billion. Chief executive Justin Hotard used that momentum to lift the growth outlook for the optical and IP network businesses. On paper, the pivot toward data-center infrastructure and network buildout is gaining speed. The problem is that the broader industry is simultaneously wrestling with the cost side of the AI equation.
Should investors sell immediately? Or is it worth buying Nokia?
That tension came into sharp relief last week when Swedish rival Ericsson reported a 6% drop in second-quarter revenue, to 52.7 billion Swedish kronor, and its finance chief warned that the entire industry is feeling the strain from AI-related investment burdens — "including us," according to Reuters. The comment rattled Nokia investors who had bet that AI-driven growth would offset the persistent weakness in traditional telecom infrastructure. The stock underperformed its crosstown rival by 5.2 percentage points over the past month and trailed the OMX Helsinki 25 index by 18.7 points. Adding to the pain, a rotation out of technology names sent the Philadelphia Semiconductor Index into a bear market, down roughly 20% from its record, as fears of competition from Chinese AI models like Kimi K3 rattled sentiment.
The technical damage has been swift and severe. Nokia has closed lower for five consecutive sessions, briefly recovered above €11 earlier this month, then slumped back toward the €9 area. The stock now trades roughly a quarter below its 50-day moving average of €11.90. Currency effects offer no relief — the euro-dollar exchange rate sits close to Nokia’s own planning assumptions, leaving the operating business to do the heavy lifting. That means all eyes will be on margins, cost discipline, and the substance of new growth areas in Thursday’s report. The optical networks segment, in particular, will be scrutinised for signs that AI-driven demand can genuinely compensate for the cyclical downturn in telecom spending.
Analyst webcast has been moved to 15:00 Finnish time, a scheduling tweak that may reflect the density of the numbers. For investors, the math is simple but brutal: if Q2 disappoints, the second-half profit cliff becomes steeper still. The stock has already priced in a considerable margin of doubt, but Thursday will test whether the selloff was justified — or whether Nokia’s AI narrative still has enough horsepower to pull the shares out of their tailspin.
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