Nokia Shares Rebound from 40% Swoon, but Earnings Must Prove AI Story is Real
Published on 07/21/2026 at 13:52 | Redaktion boerse-global.de
Nokia’s stock clawed back 4.25% on Tuesday, offering a brief respite after a punishing selloff that wiped more than two-fifths of the company’s market value from its June peak. The bounce comes just two days before the Finnish network equipment maker reports second-quarter results, setting up a high-stakes test of whether its artificial-intelligence push can compensate for persistent weakness in the legacy telecom business.
Even after Tuesday’s recovery, shares trade roughly 38% below the 52-week high of €14.97 reached on June 3. At the trough of the recent rout, the decline had deepened to 40.61%. The slide accelerated over the past seven sessions, during which the stock lost 13.4% and closed Monday at €8.89. Technical indicators now signal an oversold condition — the relative strength index stands at 31.4 — suggesting the potential for a short-term bounce, but the fundamental jitters have yet to ease.
A major source of those jitters came from rival Ericsson. The Swedish competitor’s quarterly sales fell 6% to SEK 52.7 billion, though operating profit of SEK 6.52 billion edged past the consensus estimate of SEK 6.42 billion. More troubling for Nokia investors was a remark from Ericsson’s chief financial officer, who told Reuters that the entire AI buildout is pressuring the industry — “including us.” The statement reinforced fears that the widely touted AI infrastructure boom may not translate into clean profit gains for traditional telecom vendors.
Should investors sell immediately? Or is it worth buying Nokia?
Nokia had already been caught in a broader technology rout earlier this month after Chinese AI startup Moonshot AI launched its low-cost Kimi K3 model, sending the Philadelphia Semiconductor Index into a multi-day slump. Network and chip stocks sold off indiscriminately, and Nokia was swept up despite having reported operational progress in its own AI business. In the first quarter, the AI/cloud segment posted 49% revenue growth and secured contracts worth around €1 billion. Optical networks rose 20% on a currency-adjusted basis, while fixed networks shrank 13% — a split that continues to fuel debate about the company’s overall growth trajectory.
Analysts have largely stayed on the bull side. The consensus calls the stock a “Moderate Buy” with an average price target of $12.57. JPMorgan stands out with an Overweight rating and a $21 target, a vote of confidence that contrasts sharply with the recent price action. Separately, a congressional filing showed that U.S. Representative Laurel M. Lee (R-Fla.) sold Nokia shares worth between $1,001 and $15,000 on June 2, a transaction disclosed on July 19 but carrying no obvious signal about the company’s fundamentals.
The real reckoning comes Thursday morning, when Nokia releases its first-half results. Analysts expect earnings per share of $0.07 on revenue of $5.59 billion. The EPS forecast represents roughly 16% of the full-year consensus estimate — at the high end of Nokia’s historical second-quarter range of 12% to 16%. That seasonality leaves little margin for error: any miss would force the company to deliver a much stronger second half simply to hit annual targets. Currency tailwinds look absent, with the euro-dollar rate near management’s planning assumptions, so operating performance alone must shoulder the burden.
Investors will scrutinize the optical-networks segment for signs that AI-driven demand is producing real revenue, not just order momentum. They will also watch margins and cost control. Tuesday’s rally suggests some buyers are willing to bet on a turnaround, but the earnings report will determine whether the AI narrative can survive the heavy pull of the traditional telecom cycle — or if this bounce is merely a pause before the next leg lower.
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