Nokia's stock experienced a significant setback on Friday, declining 6.27% to close at €12.49 in Helsinki. This drop outpaced the broader OMX Helsinki 25 index, which slipped a modest 0.62%. The decline marks a sharp reversal for the Finnish telecom equipment maker, whose shares had been riding a wave of optimism tied to artificial intelligence-driven demand.
In the United States, Nokia's American Depositary Receipts (ADRs) ended the session 2.88% lower at $14.84, marking a third consecutive day of losses. The ADR now sits 10.74% below its 52-week high of $16.63, reached on May 26. The pullback has erased a portion of the gains that had propelled the stock to levels not seen since 2010.
The recent rally in Nokia shares was largely fueled by expectations that AI-related investments in data centers would drive demand for optical networks—fiber systems that handle massive data volumes. In April, the company reported a 54% surge in comparable operating profit for the first quarter, reaching €281 million, while sales to AI and cloud customers jumped 49%. These results had sent the stock to multi-year highs.
However, the sell-off in the latter part of the week suggests that some investors are taking profits and reassessing the sustainability of the AI-driven momentum. The decline occurred despite a generally positive finish for European stocks in May, with the STOXX 600 index edging higher and ending the month up 2.5%. This divergence indicates that Nokia's slide was more company-specific than a reflection of broader market sentiment.
Investors are now looking ahead to the Bank of America Global Technology Conference on June 2, where Nokia's investor relations chief, David Mulholland, is scheduled to meet with investors. The company's next earnings report is expected on July 23. The conference could provide clarity on the company's outlook and whether the recent AI-related demand is sustainable.
Competitors in the networking space showed mixed performance on Friday. Ericsson's U.S. ADR gained 2.59%, while Ciena closed up 1.86%, indicating that the sell-off in Nokia was not a sector-wide phenomenon. The coming sessions will be critical in determining whether the pullback is a temporary pause in a bullish trend or a sign that the stock's valuation has become stretched.
CEO Justin Hotard has expressed confidence in the company's trajectory, stating in April that Nokia was tracking somewhat above the midpoint of its 2026 comparable operating profit outlook of €2.0 billion to €2.5 billion. The company also reported that AI and cloud orders reached €1 billion in the first quarter. To further cement its position, Nokia opened an AI Networking Innovation Lab in Sunnyvale, California, on May 21, partnering with firms including AMD, Keysight, Lenovo, Nscale, and Supermicro.
Despite the positive developments, risks remain. AI orders could slow, and weaker demand from traditional telecom carriers may not be fully offset by new growth areas. Fixed Networks sales, for instance, fell 13% in the first quarter on a constant currency basis. Additionally, high valuations in AI-linked stocks leave little room for error, especially if cloud capital expenditure slows or European equities face renewed pressure.
Insider activity has also drawn attention. Victoria Hanrahan, a senior manager at Nokia, purchased 44,682 NYSE-listed shares on May 26 and May 28 at an average price of $15.8117, as disclosed in a regulatory filing. Such transactions are often viewed as a signal of confidence from company insiders.
As markets reopen on Monday, all eyes will be on Nokia to see if the stock can stabilize or if further selling pressure will emerge. The outcome could set the tone for the company's performance in the weeks ahead.
