Nokia shares declined 5.87% on Friday, closing at €13.08 in Helsinki, as the company executed a €500 million debt issuance to refinance notes maturing in 2028. Despite the session's loss, the stock retained a 4.72% gain for the week, reflecting underlying investor optimism tied to artificial intelligence infrastructure demand.
The Finnish telecommunications equipment maker sold €500 million in senior unsecured notes under its euro medium-term note program. The new debt carries a fixed coupon of 3.625% and matures June 5, 2032. Proceeds will be used for general corporate purposes, including refinancing the company's €500 million, 3.125% notes due May 2028.
Friday's selloff occurred amid a broader market pullback, with the Nasdaq Composite falling 4.18% and the OMX Helsinki 25 index dropping 1.12% to 6,471.52. In New York, Nokia's American depositary receipts tumbled 13.48% to $14.38. The market's decline was fueled by a solid U.S. jobs report that reignited concerns about the Federal Reserve maintaining a hawkish stance, particularly pressuring technology stocks.
Nokia's recent rally, which pushed shares to €14.80 earlier in the week, has prompted investors to reassess whether the company's business is undergoing a genuine transformation or simply benefiting from AI infrastructure hype. The stock's volatility underscores the tension between AI-driven growth prospects and competitive and cost pressures.
Analysts remain cautiously optimistic. Northland analyst Tim Savageaux raised his price target on Nokia to $20 from $13, maintaining an Outperform rating. He cited supportive comments from Nvidia's CEO, Hewlett Packard Enterprise's AI data-center results, and Alphabet's capital spending plans as positive catalysts for the sector. Savageaux pointed to faster near-term AI optical demand and a longer cycle ahead.
Nokia's first-quarter results provide a foundation for the bullish view. Comparable operating profit surged 54% to €281 million, while net sales from AI and cloud customers climbed 49%, now representing 8% of total revenue. CEO Justin Hotard stated that Nokia is tracking above the midpoint of its full-year comparable operating profit outlook of €2.0 billion to €2.5 billion.
Hotard has emphasized that Europe's infrastructure gap is a key challenge. "The issue today is Europe doesn't have the infrastructure," he told Reuters, warning that AI data centers in Europe require both adequate connectivity and physical space to compete with the U.S. and China.
Nokia's management is set to address investors at the Bank of America Global Research C-Suite TMT Conference in London on June 10. CFO Marco Wirén, head of investor relations David Mulholland, and IR director Paula Ormsby-Draper will attend. The company's second-quarter results are scheduled for July 23, with a closed window beginning June 23.
Rival Ericsson shares slid 2.58% on Friday but gained 0.75% over five days. Ciena, which focuses on optical networking, reported fiscal Q2 revenue of $1.57 billion, up 40% year-over-year, though its stock fell as the market had already priced in strong AI bandwidth demand.
Nokia's outlook remains tempered by risks including intense competition, shifts in customer spending, component costs, supply chain disruptions, tariffs, currency fluctuations, and rising interest rates. AI contracts may take time to materialize in revenue, and additional costs or delays could compress margins before growth accelerates.
