Nokia Oyj (HEL:NOKIA, NYSE:NOK) continued its recent slide on Monday, with shares trading at €11.71 in Helsinki, down 0.68%, following a 2.46% drop in its New York ADR to $13.49. The decline extends a pullback that has erased approximately €18.5 billion in market capitalization since the stock hit its highest level in over 15 years on June 3.
AI-optical momentum under scrutiny
The selloff is not tied to any new profit warning; Nokia's last stock exchange communication was a routine treasury-share transfer on June 9. Instead, traders appear to be reassessing the AI-driven surge that propelled the stock to €14.995 in Helsinki, a level not seen since 2010. With the second-quarter earnings report scheduled for July 23, the stock is now trading as a bet on the sustainability of AI-cloud demand rather than Nokia's traditional telecom equipment business.
The decline has been sharp: from the June 3 peak to the current level, Nokia's shares have lost about 21.9% of their value. The market cap has shrunk from around €84.4 billion to roughly €65.9 billion, based on a share count of approximately 5.63 billion. This pullback comes despite a strong first quarter, where comparable operating profit surged 54% to €281 million, beating analyst expectations of €250 million, driven by a 49% jump in sales to AI and cloud customers.
Market context and technical levels
On Thursday, Nokia's ADR declined 2.46% even as the Nasdaq Composite rose 1.91%, signaling that investors are rotating away from the AI play narrative. Trading volume on the ADR exceeded its 50-day average, indicating heightened interest. Technically, the stock is testing support near the June 10 low of €11.525. A break below that level could shift sentiment from a temporary pause to a failed breakout, potentially opening the door to a deeper correction toward traditional telecom-equipment valuations.
Bears argue that the AI premium may be running ahead of earnings. If Q2 results show weaker AI-cloud orders, flat optical networks margins, or a larger drag from legacy mobile infrastructure, the stock could face further downside. On the other hand, bulls point to the company's expanding role in data center connectivity. On June 18, Nokia, t3 Broadband, and Aureon announced a partnership to deploy an optical transport network starting at 100 Tb/s, scalable to 400 Tb/s, linking a North Dakota data center to Chicago. "AI is accelerating the need for scalable, high-performance connectivity between data centers," said Matt Young, Nokia's vice president of sales.
Fundamentals and strategic shifts
Nokia's first-quarter results highlighted a strategic shift: Network Infrastructure sales grew 6% at constant currency, with Optical Networks climbing 20%. CEO Justin Hotard noted, "We are increasing our growth assumption for Optical and IP Networks." The company's AI and cloud customer orders reached €1 billion in Q1. However, the full-year comparable operating profit guidance remains at €2.0 billion to €2.5 billion, and Q1 free cash flow was €0.6 billion, with net cash of €3.8 billion.
Beyond the AI narrative, Nokia's licensing business continues to generate value. On June 18, Nokia and Lenovo signed a multi-year, multi-technology patent cross-license agreement, though financial terms were not disclosed. Susanna Martikainen, head of licensing at Nokia, called the deal "proof of the strength of Nokia's patent portfolio," reminding investors that the company is more than just a hardware play. Additionally, Nokia Defense and KNDS announced a partnership at Eurosatory to integrate secure 5G connectivity into combat vehicles, drones, and soldier systems, though this is not currently driving share price action.
Outlook and catalysts
With Q2 and half-year 2026 results due on July 23, Nokia's stock is likely to remain sensitive to sentiment around optical networks and their role in AI infrastructure. Until then, HEL:NOKIA trades more on the narrative of data center bottlenecks than on traditional telecom cycles. The next few weeks will determine whether the recent pullback is a healthy reset or the beginning of a more significant correction.
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