Nokia Corporation's stock declined in Helsinki on Monday, extending losses from the previous week as traders retreated from technology stocks tied to artificial intelligence. The shares traded at 12.690 euros, marking a 2.98% decrease from the prior close. This follows a period of heightened volatility for the Finnish telecommunications equipment maker.
The sell-off was part of a broader market downturn affecting AI-related stocks across Europe. The STOXX 600 index fell 0.9%, while technology stocks within the index dropped 2.1%. Market participants attributed the decline to rising crude oil prices, fueled by tensions in the Middle East, and growing concerns that the Federal Reserve may keep interest rates higher for longer.
Nokia's U.S.-listed American Depositary Receipts experienced an even sharper decline, falling 13.48% to $14.38 on Friday, according to MarketWatch. This marked the third consecutive daily loss for the ADRs, while the Nasdaq Composite Index slid 4.18% during the same period.
The company's transformation into an AI infrastructure play has been a key driver of investor interest. Last year, Nvidia announced a $1 billion investment in Nokia as part of an AI-RAN collaboration, which uses artificial intelligence and faster chips within mobile radio networks. This deal repositioned Nokia in the eyes of many investors from a slow-growing telecom equipment supplier to a player in the AI data center space.
In a separate development, Nokia announced on Friday the pricing of 500 million euros in senior unsecured notes, carrying a fixed coupon of 3.625% and maturing in 2032. The company intends to use the proceeds for general corporate purposes and to refinance 500 million euros of notes coming due in 2028. This debt issuance comes at a time when the company is navigating a challenging macroeconomic environment.
The bull case for Nokia continues to rest on its optical networks and cloud customer business. In its first-quarter earnings report released in April, Nokia reported that net sales from AI and cloud customers surged 49% year-over-year, with orders from these groups reaching 1 billion euros. CEO Justin Hotard stated that demand had "accelerated significantly." As a result, the company raised its 2026 Network Infrastructure sales growth forecast to 12%-14%.
Analysts at S&P Global Market Intelligence's Visible Alpha have identified Nokia as one of Europe's telecom standouts this year, driven by AI-related demand boosting sentiment around its network infrastructure business. They project Nokia's optical networking revenue will increase 31% year-on-year to 4 billion euros in 2026.
Competition remains a key factor. Following Nokia's acquisition of Infinera, Reuters reported that the deal would elevate Nokia to the second position in optical networking with a 20% market share, just behind Huawei. This could enhance Nokia's sales to technology companies building AI data centers. Ciena, another player in the optical networking space, saw its stock decline last week despite reporting solid results, indicating that market expectations have become increasingly demanding.
Macroeconomic factors continue to weigh on the stock. Gary Schlossberg, a market strategist at Wells Fargo Investment Institute, noted that the strength of the U.S. economy "adds to inflation risk coming from the Gulf," making it more difficult for the Federal Reserve to move toward rate cuts. Meanwhile, Ohsung Kwon, chief equity strategist at Wells Fargo, described semiconductors as "way overbought" but expressed confidence that the bull market for chips is not yet over.
Nokia's next earnings report is scheduled for July 23, when the company will release its second-quarter and half-year 2026 results. Until then, the stock may continue to trade more like an AI infrastructure play than a traditional Nordic telecom, leaving little room for disappointment.
