Nokia’s AI Orders Hit €2.8 Billion, but a €732 Million Cash Drain Has Investors Running for Cover
Published on 07/26/2026 at 21:20 | Redaktion boerse-global.de
Nokia’s stock closed at €8.06 on Friday, shedding 6.32% in a single session and extending a 30-day slide that now totals 33.53%. The sell-off looks brutal on paper, yet it comes from a company that just reported record demand for its artificial intelligence infrastructure. The disconnect between operational momentum and market sentiment is widening by the day.
The relative strength index has dropped to 29.5, a level that typically signals an oversold condition. From its 52-week peak of €14.97, the stock has lost 46% of its value. Even so, Nokia remains up 44.19% year-to-date and has gained a staggering 116.90% over the past twelve months — a reminder that the recent pain follows an extraordinary run.
Dividend Arrives at an Awkward Moment
Shareholders are due a €0.04 per share quarterly payout, with the ex-dividend date set for Monday, July 27. The record date follows on July 28, and payment is scheduled for August 6. Management has also signaled it could distribute up to an additional €0.06 per share in future payouts, keeping a reserve on hand.
The dividend lands as the stock sits in technically oversold territory — a combination that tends to attract the attention of chart-watching traders.
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AI Orders Triple, but the Cash Story Is Messy
The headline numbers from Nokia’s second quarter are hard to ignore. Orders in the AI and Cloud segment surged to €2.8 billion, nearly tripling from €1 billion in the first quarter. Revenue in that division almost doubled to €446 million. Hyperscalers and cloud providers are driving the demand, pouring money into data center connectivity and optical networking gear.
The broader business is also firing. Network Infrastructure revenue rose 12%, with Optical Networks up 20% and IP Networks climbing 16%. Group net sales grew 9%, gross margin expanded 70 basis points to 46%, and operating margin matched that improvement, also rising 70 basis points to 9%.
Yet the cash flow statement tells a different story. Nokia posted negative free cash flow of €732 million in the second quarter. The company blames seasonal factors — employee bonuses and higher working capital needs — but the figure has unnerved investors who wonder whether the order boom is translating into real money fast enough.
Chip Shortages Cap the Enthusiasm
CEO Justin Hotard has poured cold water on any notion of a smooth ride ahead. He warned that memory chip shortages will remain the industry’s main bottleneck through 2027. That constraint, combined with tight supply of indium phosphide wafers, threatens to slow Nokia’s ability to convert its bulging order book into delivered revenue.
Management itself describes the AI and Cloud order flow as “lumpy” — unpredictable and hard to forecast. While Nokia expects to convert roughly half of the €2.8 billion in orders into revenue within the next twelve months, the execution risk is real.
The company is taking steps to secure its supply chain. On July 23, it signed a binding agreement to acquire an NXP Semiconductors manufacturing facility in Chandler, Arizona. The deal will proceed in stages: Nokia will lease the capacity starting in early 2027 to produce indium phosphide components for optical applications, with full ownership of the site transferring in the first quarter of 2029.
Restructuring Costs Add to the Pressure
Nokia is running a restructuring program that will generate around €800 million in costs this year. That money is being redirected toward growth areas like AI-RAN and optical infrastructure, but it weighs on near-term profitability. The company has also trimmed its full-year capital expenditure guidance to between €800 million and €900 million, down from a previous range of €900 million to €1 billion.
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Management has held firm on its 2026 outlook, targeting comparable operating profit between €2.1 billion and €2.6 billion. For the third quarter, Nokia expects operating results similar to the second quarter and has guided for sequential revenue growth of 3% to 7%.
The Third Quarter Will Settle the Debate
The bull case rests on the idea that the cash flow squeeze is temporary — a function of seasonality and upfront investment that will reverse as orders convert to revenue. The stock still trades about 3% above its 200-day moving average of €7.84, suggesting the long-term uptrend remains intact.
The bear case is that supply chain bottlenecks and restructuring costs could turn the cash flow problem into a structural feature, not a seasonal bug. If the third quarter delivers another negative free cash flow reading, the skepticism that has driven the stock down over the past month will likely intensify.
With annualized 30-day volatility at 66.88%, Nokia’s shares are primed for sharp moves in either direction. The €8.00 level will be the first test of support in the week ahead — and the third-quarter earnings report will determine whether the recent sell-off was a buying opportunity or the beginning of a deeper correction.
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