Nokia's China Retreat Tests Investor Patience as AI Orders and Insider Buying Offer Counterbalance
Published on 08/18/2026 at 18:11 | Redaktion boerse-global.de
The Finnish telecom equipment maker is walking a tightrope between contraction and expansion. Nokia confirmed it will wind down its radio technology research facility in Hangzhou by the end of 2026, eliminating roughly 1,600 positions — a move that underscores a broader strategic withdrawal from a market that has become increasingly hostile to Western network vendors. Staff at the affected site were informed last Thursday.
The Hangzhou closure is just one piece of a much larger restructuring effort. Nokia has more than tripled its 2026 restructuring budget, lifting it from an initial €250 million to €800 million, with €350 million earmarked specifically for China. Media reports suggest similar actions could follow at facilities in Beijing, Chengdu, Qingdao and Shanghai, though the company has not formally confirmed those plans.
The retreat marks the latest chapter in a long decline for Nokia's Chinese operations. Greater China headcount has already shrunk from 13,700 in 2020 to 7,200 in 2025, and the Hangzhou closure will accelerate that trajectory. The move comes less than a year after Nokia took full control of its Nokia Shanghai Bell joint venture, and fits within a cost-saving program launched in 2023 that targets gross savings of €800 million to €1.2 billion by the end of 2026 — a range Nokia says it is tracking toward the upper end.
Investors, however, are not waiting to see how the story unfolds. The stock fell 5.4% on the day to €8.89, having closed at €9.39 the previous session. That leaves the shares roughly 41% below the 52-week high of €14.97 reached in early June, though they remain up 59% since the start of the year. The gap between the recent peak and current levels suggests the market is weighing the cost of the China exit against the company's growth story elsewhere.
Should investors sell immediately? Or is it worth buying Nokia?
That growth story is, by most measures, compelling. Second-quarter earnings per share climbed to €0.07 from €0.04 a year earlier, with revenue rising to €4.82 billion. The standout figure is an order backlog of €2.8 billion in the AI and cloud segment, where sales more than doubled. Management also raised its full-year operating profit guidance to a range of €2.1 billion to €2.6 billion, up from a prior €2.0 billion to €2.5 billion, partly reflecting the reclassification of the Fixed Wireless Access CPE and Enterprise Campus Edge divisions as discontinued operations. For the third quarter, Nokia expects net sales to grow 3% to 7% sequentially.
The company has also been building out its AI credentials on the product side. In August, it launched its first commercial AI-RAN platform, built on its Aerial technology and Nvidia's accelerated computing architecture. The platform uses artificial intelligence to squeeze more capacity out of existing 4G and 5G radio networks while laying the groundwork for a future transition to 6G.
Against that backdrop, some insiders have been putting their own money on the table. Senior manager David Heard purchased 1,171 Nokia shares on August 13 at €9.0910 apiece, while fellow senior manager Raghav Sahgal bought 2,890 shares at the same price on the same day. Such purchases are often read as a confidence signal, even if they do little to offset the negative headlines around China. Separately, Nokia transferred 957,142 treasury shares to participants in its share-based compensation programs earlier this month, leaving it with 87,626,482 own shares — a routine move that carries no market significance on its own.
Analyst opinion remains split. Bank of America and SEB Equities both upgraded their views on Nokia in early August, citing AI and cloud demand: Bank of America raised its price target to $18.50 with a buy rating, while SEB Equities moved to buy with a €12 target. Just last Wednesday, however, AlphaValue/Baader Europe cut its recommendation to "Reduce" — even as it lifted its price target, a combination that suggests the shares may have already priced in much of the good news.
The central question for investors is whether Nokia can offset the pain of exiting China with momentum in higher-growth areas like AI infrastructure. The restructuring will weigh on near-term costs, but it also removes a drag from a chronically low-margin market. For now, the market seems to be reserving judgment — the stock's sharp drop on the China news shows how sensitive sentiment remains, even with the AI engine firing on all cylinders.
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