Nokia's Two-Front War: Exiting China While Chasing the AI Supercycle
Published on 08/24/2026 at 14:41 | Redaktion boerse-global.de
The numbers tell a stark story of retreat. Nokia's revenue in Greater China has collapsed from €2.2 billion in 2018 to just €913 million in 2025 — a 58% slide that has left the Finnish network equipment maker with a market share of under 3% in the lucrative 5G segment. Local headcount has been cut from 13,700 to 7,200 over the same period. Against domestic champions Huawei and ZTE, the company simply cannot compete.
The response came this week: Nokia confirmed it will shutter its research and development center in Hangzhou, eliminating roughly 1,600 positions and closing most of its local sites by the end of 2026. The move marks the culmination of a years-long withdrawal from the world's largest telecom market.
Yet even as Nokia retreats from China, it is doubling down elsewhere. The company raised its full-year 2026 guidance last week, now projecting operating profit of €2.1 billion to €2.6 billion, driven by stronger-than-expected order intake in AI and cloud. That single announcement triggered a cascade of price target hikes across the analyst community.
Bank of America had already pointed to €2.8 billion in AI and cloud orders for the second quarter back in mid-August, lifting its target to $18.50 with a "Buy" rating. JPMorgan Chase followed suit, reaffirming its "Overweight" stance with a $21 target, arguing the market is significantly underestimating Nokia's AI and cloud revenue potential for 2027 and 2028. Morgan Stanley raised its Helsinki-listed target from €8.50 to €11.00, while JPMorgan moved from €6.90 to €12.00. Argus upgraded the US-listed shares from "Hold" to "Buy" with a $15.00 target, citing momentum in the AI-powered networking business. SEB Equities had already upgraded to "Buy" on August 19 with a €12.00 target, pointing to accelerated demand for AI-native infrastructure.
The strategic pivot is also reshaping Nokia's corporate structure. Four business divisions are being consolidated into two, with resources redirected toward 6G research and artificial intelligence. Reports suggest an additional 2,000 job cuts are planned in Europe. The restructuring is designed to channel capital and capacity into areas where Nokia can still grow — particularly the AI and cloud segment, which has shown robust momentum.
Should investors sell immediately? Or is it worth buying Nokia?
On the technology front, Nokia is burnishing its credentials. The Omdia report "Market Landscape: Core Vendors" ranked Nokia first in mobile core portfolio for the second consecutive time, across all seven categories assessed, including 5G core, cloud-native architectures, and AI/ML capabilities. The company also points to the world's first commercial 5G core solution delivered as software-as-a-service. Omdia analyst Roberto Kompany praised the company's comprehensive approach.
Early August brought another milestone: Nokia and Nvidia jointly launched what they claim is the industry's first commercial AI-RAN platform, using AI-native anyRAN software to improve spectral efficiency in 4G and 5G networks. Nvidia's $1 billion investment in Nokia underscores confidence in the Finnish group's AI ambitions beyond traditional networking. Nokia also signed a multi-year exclusive agreement with Orange Belgium to modernize its transport network using the Nokia 1830 Photonic Service Switch platform.
The market, however, remains unconvinced — at least for now. The stock closed Friday at €8.80, up 0.7% on the day, but down 6.0% on the week. That puts the shares roughly 41% below their 52-week high of €14.97 reached in early June, despite having more than doubled over the past twelve months. On Monday, the shares slipped another 1% to €8.71.
Analysts see the recent pullback as a temporary setback rather than a trend reversal. Of 18 analysts covering the stock, 13 rate it a "Buy," three say "Hold," and two recommend "Sell," yielding a "Moderate Buy" consensus with an average twelve-month target of $12.57. The second quarter 2026 results supported the constructive view: Nokia beat earnings expectations with $0.08 per share against a consensus of $0.07, while revenue grew 8.4% year-over-year.
Insiders appear to share that confidence. Five senior managers — Victoria Hanrahan, Stephan Prosi, Louise Fisk, Raghav Sahgal, and David Heard — collectively acquired 4,580 shares on August 13 at €9.0910 per share in a disclosed transaction.
The central question for investors is whether Nokia can offset the painful China retreat quickly enough through growth in AI, optical networks, and 6G research. The technology leadership in mobile core and the Nvidia partnership provide supporting evidence. The next test comes on October 22, when Nokia reports its next quarterly results — the first real check on whether the raised guidance translates into concrete numbers.
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