Nokia's AI-Driven Surge Takes a Breather as Fixed-Line Weakness and Triple-Digit P/ E Trigger Profit-Taking
05.06.2026 - 15:57:32 | boerse-global.de
The air has come out of Nokia’s blistering rally. After nearly quadrupling in value over the past year and hitting a 52-week high of 14.97 euros just two days earlier, the Finnish telecom equipment maker saw its shares slip as much as 4.4% on Friday, touching 13.60 euros intraday before recovering slightly to close near 13.81 euros. The selloff was not a one-day affair — on Thursday, the stock had already dropped over 6% in Helsinki on volume exceeding 20 million shares, well above its daily average.
Two distinct forces are behind the pullback. The first is company-specific: Nokia’s fixed-line segment, long a laggard, posted a 13% revenue decline, casting a shadow over an otherwise buoyant narrative. The second is valuation-driven. With the stock trading at a price-to-earnings ratio north of 100 after a year-to-date surge of roughly 150%, profit-taking was all but inevitable — especially following a string of sessions where daily gains reached as high as 8%.
None of this diminishes the structural transformation underway. Nokia has repositioned itself as a key supplier for AI network infrastructure, and the numbers back that up. In the first quarter of 2026, its AI/cloud segment posted currency-adjusted revenue growth of 49%. Separate AI-related orders worth around one billion euros came in during that quarter alone — from clients including OpenAI and CoreWeave. The jewel in the crown is an alliance with Nvidia, which invested roughly one billion U.S. dollars in Nokia in October 2025 at a price of $6.01 per share, an entry point now almost three times higher. Nvidia holds about 2.9% of Nokia and is collaborating on AI-RAN solutions that embed machine learning capabilities directly into mobile networks.
Should investors sell immediately? Or is it worth buying Nokia?
Analysts remain broadly bullish despite the consolidation. Nordea recently lifted its price target from 10.50 euros to 15.70 euros and reiterated a buy rating. Northland, a U.S. research firm, is even more aggressive with a $20.00 per share target. The optimism is anchored in Nokia’s expanding order book and its acquisition of fiber-optic specialist Infinera for $2.3 billion. That deal has already helped drive 20% growth in the optical networks segment during the first quarter. For the full year, Nokia is guiding for an operating profit between 2.0 and 2.5 billion euros, with its network infrastructure division targeting 12% to 14% revenue growth.
Technically, the stock remains in a comfortable position. Even after the retreat, Nokia shares trade roughly 30% above their 50-day moving average of 10.45 euros, and the relative strength index has slipped to 60.6, indicating the market is merely catching its breath rather than entering overbought territory. The options market tells a slightly different story: traders have built up roughly 100,000 contracts each of July puts and July calls at the 15-euro strike, pointing to heightened volatility expectations around the next major catalyst.
That catalyst arrives on July 23, when Nokia reports its second-quarter results. Investors will scrutinize whether the AI and optical segments can generate enough momentum to offset ongoing pressure in fixed-line. Management has set a free cash flow conversion rate target of 55% to 75%, a metric that will be closely watched as a gauge of operational execution. A sequential revenue increase of 5% to 9% has already been telegraphed for the current quarter. If those numbers miss, the triple-digit valuation will look far less forgiving.
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