Nokia’s €2.8 Billion AI Order Book Meets a €732 Million Cash Drain — Two Forces Pulling the Stock Apart
Published on 07/31/2026 at 03:21 | Redaktion boerse-global.de
Nokia is presenting investors with a puzzle that defies easy classification. The Finnish network equipment maker has amassed a €2.8 billion pile of AI and cloud orders, yet its stock has shed nearly a third of its value in the past month. The contradiction has left the market trying to decide whether this is a buying opportunity or a value trap dressed up in artificial intelligence hype.
The shares jumped 7.91 percent on Thursday to €7.94, snapping a brutal selloff that wiped 32.59 percent off the price in 30 days. The rally found support from an unlikely source: S&P Global, which on July 30 upgraded Nokia’s credit outlook from “stable” to “positive” while reaffirming its BBB- rating. The agency cited Nokia’s successful pivot away from its struggling legacy telecom business toward AI infrastructure and cloud networking, pointing specifically to what it called the “AI supercycle” now flowing through the company’s Network Infrastructure segment.
That endorsement matters because it provides a counterweight to the supply-chain anxieties that have been hammering the stock. Memory-chip shortages had been weighing on sentiment, but S&P’s move suggests that Nokia’s bulging order book in optical and IP networks can absorb the restructuring risks the company is grappling with.
The Order Book That Changes the Math
The numbers behind the AI push are striking. Nokia booked €2.8 billion in AI and cloud orders during the second quarter — roughly 6.3 times the segment’s quarterly revenue. Revenue from those areas has already doubled to €446 million, a 105 percent jump year over year. The company’s adjusted operating profit of €434 million came in 15.4 percent above market expectations, even as overall revenue of €4.815 billion slightly missed consensus.
Should investors sell immediately? Or is it worth buying Nokia?
The question now is whether Nokia can convert those orders into actual cash. The company reported negative free cash flow of €732 million, weighed down by restructuring costs that are expected to run between €700 million and €800 million for the full year. Analysts at Wolfe Research have warned that demand for AI chips and related hardware will outstrip supply at least through 2028, meaning component shortages could delay or even cancel parts of that €2.8 billion backlog.
Technical Signals Point Both Ways
Chart watchers see reasons for cautious optimism. The stock is trading just 0.42 percent above its 200-day moving average of €7.91, a level that has historically attracted institutional buyers. The 14-day relative strength index sits at 33.7, flirting with oversold territory. That combination of a long-term support line and a washed-out momentum indicator has often preceded stabilization in the past.
But the technical picture is far from clean. The stock remains 47.66 percent below its 52-week high of €14.97 and is trading 30.74 percent below its 50-day moving average of €11.31. The annualized volatility of 71.72 percent leaves plenty of room for further swings in either direction.
The Strategic Bet on AI-RAN
Operationally, Nokia is betting its future on AI-RAN, a software-based radio access network that launched commercially in July 2026. Developed with partners including Nvidia, the technology shifts Nokia’s mobile business from a hardware-heavy model to a subscription-based one, aiming for higher margins through recurring revenue rather than one-off equipment sales.
The company’s management has stuck by its 2028 margin target of an adjusted operating profit between €2.7 billion and €3.2 billion. On July 23, the board approved a dividend of €0.04 per share, payable on August 6, 2026 — a modest payout that signals confidence in the turnaround while conserving cash for the restructuring.
Nokia at a turning point? This analysis reveals what investors need to know now.
What Comes Next
The immediate catalyst will be the third-quarter progress report, which should show how much of that €2.8 billion order book has been converted into recognized revenue. If Nokia can convert at least 25 percent within the next reporting period, the bull case gains credibility. If conversion lags, the bearish view — that supply-chain bottlenecks and restructuring costs will eat the growth — will strengthen.
For now, the stock is stuck near its 200-day moving average, with the market in a wait-and-see posture. The S&P upgrade and the oversold technical signal have given the bulls their first credible defense line in weeks. But with negative cash flow, component shortages, and a stock that has lost nearly half its value from its peak, the path forward depends entirely on execution. Nokia has the orders. The question is whether it can deliver.
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Nokia Stock: New Analysis - 31 July
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