Nokia's €800 Million Restructuring Bet Faces Its First Real Market Test
Published on 08/10/2026 at 20:10 | Redaktion boerse-global.de
The numbers tell two stories about Nokia right now, and both are true. Anyone who bought the stock in August 2025 is sitting on gains of nearly 130 percent. Anyone who bought at the June peak is down roughly 46 percent. The Finnish network equipment maker has gone from market darling to battleground stock in the span of a single quarter, with the shares shedding almost 26 percent in 30 days.
At the heart of that reversal lies a simple question: can Nokia's artificial intelligence ambitions translate into the kind of durable earnings growth that justifies the valuation built up during this year's spring rally?
The Zankore Gambit
Nokia's answer, unveiled this week, is a platform called Zankore. Developed alongside Indosat, the Ooredoo Group and NVIDIA, the project targets a gigawatt of AI factory capacity — a move that positions Nokia as the wiring specialist for local AI ecosystems rather than just another 5G infrastructure vendor. The strategy is deliberate: while NVIDIA and Oracle capture headlines with explosive cloud growth, Nokia wants to supply the networking backbone for NVIDIA's DSX AI factories, tapping into a data-center cycle with fatter margins than the saturated telecom equipment business.
That pivot comes with a cost. Nokia has raised its restructuring charges for the current year to roughly €800 million, pulling forward a portfolio overhaul that was originally slated to unfold more gradually. The integration of Nokia Shanghai Bell — now fully owned by the group — will be compressed from a three-year timeline into two, with integration costs of $398 million (around €350 million) booked through the end of 2026.
Should investors sell immediately? Or is it worth buying Nokia?
Portfolio Surgery
The restructuring is already reshaping what Nokia actually does. In the second quarter, the company reclassified its Fixed Wireless Access CPE business and its Enterprise Campus Edge operations as discontinued. The CPE unit is being sold to Inseego in exchange for roughly seven percent of that company's shares plus warrants valued at $20 million — a stake expected to rise to about eleven percent following an additional $10 million investment. A deal for the campus edge business is described as highly likely.
The rationale becomes clear when you look at the divisional numbers. Fixed Networks revenue fell 13 percent as telecom operators tightened infrastructure budgets and postponed investments. Network Infrastructure, by contrast, grew 12 percent, powered by optical and IP networking demand from hyperscalers building out AI data centers. Nokia is effectively doubling down on the business that's working while shedding the parts that aren't.
The Chart Says Consolidation
At €8.07, the stock sits barely above its 200-day moving average of €8.03 — the technical line that separates a healthy correction from a broken uptrend. The 14-day RSI reads 37.6, approaching but not yet entering oversold territory. The gap of nearly 24 percent below the 50-day average shows just how quickly sentiment has turned.
The Deutsche Bank view captures the mixed picture. The bank trimmed its price target from €13.50 to €11.50 roughly two weeks ago while maintaining a Buy rating. That adjustment came during a period when Nokia's shares were under pressure despite beating earnings expectations — pressure driven largely by rival Ericsson's warning about rising memory chip prices tied to AI demand, which stoked supply-chain cost concerns across the sector.
Nokia at a turning point? This analysis reveals what investors need to know now.
The Cash Flow Question
For the third quarter, Nokia guides to net sales growth of just 3 to 7 percent quarter-on-quarter with flat profit, pushing the more meaningful earnings improvement into Q4. CEO Justin Hotard insists the company enters the second half "with momentum" and remains on track to land slightly above the midpoint of its comparable operating profit guidance. Meanwhile, capex guidance for the year has been trimmed to €800–900 million from a prior range of €900 million to €1 billion — a sign of disciplined capital management during the transition.
With a market capitalization of €45.53 billion, Nokia is no longer a momentum trade. It's a valuation debate. The stock is up 44 percent year-to-date and trades nearly 130 percent above its 52-week low of €3.51 from August 2025 — but the easy money from the AI re-rating has likely already been made. The coming quarters will determine whether partnerships like Zankore convert into actual cash flow, or whether the market's patience runs out before the restructuring pays off. If the €8.03 support level breaks, investors may start asking harder questions about how quickly those AI network contracts translate into earnings — and whether the €800 million restructuring bill was the beginning of the cost, not the end.
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