Nokia's AI-Network and Cloud Push Fails to Shield Shares from 18% Weekly Rout Ahead of Earnings
Published on 07/18/2026 at 08:03 | Redaktion boerse-global.de
A brutal week for technology stocks has dragged Nokia shares to their steepest weekly decline in five years, erasing gains from a string of strategic announcements that included a landmark cloud migration deal with SAP and Microsoft Azure and the launch of a commercial AI-RAN platform with Nvidia. The stock closed at €8.90 on Friday, down 2.39% on the day and 18.31% lower over seven sessions, leaving it 40.55% below the 52-week high of €14.97 reached on 3 June.
The sell-off is part of a broader rout in semiconductor and telecom equipment stocks, triggered in part by Chinese AI startup Moonshot AI unveiling its Kimi K3 model with 2.8 trillion parameters on 17 July. The model, priced significantly cheaper than comparable offerings from OpenAI and Anthropic, rekindled doubts about the sustainability of massive capital spending on AI infrastructure. The Philadelphia Semiconductor Index fell into bear-market territory, roughly 20% below its late-June record. Adding to the pressure on Nokia, rival Ericsson disappointed with weak quarterly numbers and warned of rising costs tied to AI infrastructure, dragging the entire telecom equipment sector lower.
Cloud Migration and AI-RAN: The Strategic Underpinnings
Yet Nokia has not been idle on the operational front. The company signed a multi-year contract to migrate its entire SAP S/4HANA enterprise-resource-planning system to the RISE with SAP model hosted on Microsoft Azure. The shift, which went live at the end of 2025 and was publicly disclosed in late June and early July 2026, is designed to improve efficiency and long-term capital generation. Market observers note, however, that such large-scale migrations carry execution risks, which can weigh on investor sentiment.
Should investors sell immediately? Or is it worth buying Nokia?
Just days later, on 15 July, Nokia and Nvidia unveiled what they called the first commercially available AI-RAN platform. The technology aims to boost spectral efficiency in mobile networks by over 50% by 2027 and more than 100% by 2028. Pilot projects with network operators begin this year, with commercial deliveries expected from 2027. Nokia also plans to shift its radio-access-network business from one-time hardware sales to a software subscription model for upgrades. The announcement followed a 14 July extension of the 5G partnership with Taiwan Mobile, focused on AI-powered network functions.
Analysts Remain Upbeat Despite the Bloodbath
The market’s near-term panic has not shaken analyst conviction. JPMorgan raised its price target to $21, Argus upgraded to Buy with a $15 target, and Morgan Stanley initiated coverage with an Overweight rating and an $8 target. SEB Equities also upgraded to Buy with a €12 target (approximately $13.7). The consensus rating remains Buy, with a median price target of $14.67. At Friday’s close, Nokia traded at a price-to-earnings ratio of roughly 65 — a reflection of the lofty expectations baked into the stock after a 115.18% gain over the past twelve months and a 59.21% advance year-to-date. Those who bought the August 2025 trough at €3.45 still sit on a gain exceeding 150%.
Earnings Day Looms as Options Market Shows Nervous Positioning
All eyes now turn to 23 July, when Nokia releases its second-quarter results. The consensus calls for earnings per share of $0.07 on revenue of $5.59 billion, compared with $0.04 and $5.15 billion a year earlier. The options market signaled elevated tension ahead of the report: on 17 July, call option volume far outpaced put volume, and open interest exceeded the 30-day average by a wide margin. The 14-day relative-strength index of 31.5 sits just above oversold territory, while annualized 30-day volatility has spiked to 66.61%.
Chart technicians note a mixed picture. The stock remains 15% above its 200-day moving average, keeping the long-term uptrend intact. But the ferocity of the past week’s decline — the worst in five years — underscores how quickly sentiment can sour when valuation concerns collide with sector-wide jitters. The earnings report will determine whether Nokia can frame the sell-off as a consolidation within a powerful rally or whether the debate over overblown AI infrastructure valuations continues to drag the shares lower.
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