Nokia Oyj (HEL:NOKIA) experienced a decline in Helsinki trading on Monday, with shares closing at 11.02 euros, a drop of 1.39%. The broader OMX Helsinki 25 index also fell, losing 0.93% to 6,210.05. This decline comes as the AI-driven rally that had propelled Nokia's stock higher over the past year appears to be losing steam.
In the U.S., Nokia's American Depositary Receipts (ADRs) are expected to open lower, given the current gap between the Helsinki price and the last NYSE close. The ADR last closed at $12.07 on July 2, while the equivalent Helsinki price, converted at the current EUR/USD rate of 1.1420, stands at $12.58. This leaves the ADR trading at a 4.1% discount, a gap that U.S. investors will need to address when trading resumes after the Independence Day holiday.
Trading volume in Helsinki was notably light, with only 1.9 million shares changing hands, representing just 9% of the 65-day average volume of 19.97 million shares. The stock traded in a narrow range between 10.84 and 11.04 euros, indicating a lack of strong directional conviction.
Despite the recent pullback, Nokia's shares have had an impressive run, gaining approximately 97% year-to-date and 149% over the past 12 months. The stock remains well above its 52-week low of 3.42 euros, but still 26.5% below the 52-week high of 15.00 euros.
The decline comes as the initial excitement around AI-related orders, which had driven Nokia's optical networks business, begins to fade. Investors are now looking ahead to the company's second-quarter and half-year results, scheduled for release on July 23. These results will provide a key check on the momentum of Nokia's optical and AI orders.
In the first quarter, Nokia reported a 54% increase in comparable operating profit to 281 million euros, beating analyst expectations. The company's Network Infrastructure sales grew 6% on a constant-currency basis, with Optical Networks climbing 20% and AI and cloud customer sales jumping 49%. CEO Justin Hotard had noted an increased growth assumption for Optical and IP Networks.
Nokia recently announced a multi-year contract with Orange Belgium SA to become its sole supplier for an optical transport network upgrade. The project aims to merge fixed and mobile networks into a single optical network, supporting services from 1G through 400G and beyond. This contract aligns with the theme that has driven Nokia's stock higher since April.
For now, the market is in a wait-and-see mode, with the ADR discount and light volume suggesting caution. The upcoming earnings report will be crucial in determining whether the AI-driven momentum can be sustained or if further declines are ahead.
