Nokia Oyj (NOKIA:HEL) experienced a significant decline on Thursday, with shares trading around €9.43, down 3.6% in afternoon Helsinki trading. The stock has now fallen 10.7% over three consecutive sessions, underperforming the broader OMX Helsinki 25 index, which slipped 0.3%.
AI-RAN Timeline Raises Concerns
The selloff highlights a critical timing gap in Nokia's strategy. The company's AI-RAN (Artificial Intelligence-Radio Access Network) solutions are set to enter operator trials later this year, with commercial availability not expected until 2027. This extended timeline has left investors wary, especially as rival Ericsson (ERIC-B:STO) has issued warnings about rising costs in the sector.
Ericsson's Cost Warning
Ericsson, which reported a 6% decline in second-quarter sales to 52.7 billion Swedish crowns, has warned that AI demand is driving up memory and custom-chip costs. Its own shares have fallen 14.3% over three sessions. CFO Lars Sandström told Reuters, "The whole AI build-out is putting quite the pressure on the whole industry, including us." This warning directly impacts Nokia, as component cost inflation may arrive before AI-RAN revenue materializes.
Upcoming Earnings and Market Expectations
Nokia is scheduled to report its second-quarter results on July 23. The company maintains its guidance for comparable operating profit of €2.0 billion to €2.5 billion for the full year, with management expecting Q2 to contribute 12% to 16% of that total. At the midpoint, this implies Q2 comparable operating profit in the range of €270 million to €360 million, though this is a calculation, not official guidance.
Valuation and Performance Metrics
| Measure | Nokia | Ericsson B |
|---|---|---|
| July 16 price | €9.43 | SEK 96.64 |
| July 16 move | -3.6% | -0.7% |
| Three-session move | -10.7% | -14.3% |
| Trailing P/E | 66.6x | 12.8x |
| AI timing | Pilots end-2026; commercial in 2027 | Cost inflation now; Q3 margin pressure |
While the earnings multiples are trailing and not directly comparable, Nokia's multiple of 66.6x exceeds Ericsson's 12.8x by more than five times, raising the proof burden ahead of the upcoming report.
Technology and Partnerships
Nokia has built its AI-RAN platform in partnership with NVIDIA Corp (NVDA:NASDAQ). The company claims spectral efficiency—the amount of data carried per unit of spectrum—has improved by more than 20%. It targets a 50% improvement by 2027 and over 100% by 2028, with upgrades delivered via software subscriptions. Chief Executive Justin Hotard described AI-RAN as "the biggest innovation in radio in decades," while Omdia analyst Rémy Pascal called it "an important step in bringing AI-RAN from industry vision to commercial reality."
Risks and Outlook
Despite the optimism, risks remain. Nokia's efficiency claims come from controlled internal tests, and operator trials may yield smaller gains. Final product pricing is undisclosed, and operators remain wary of power consumption. Component inflation could squeeze margins before subscription revenue scales. The next major test arrives July 23 at 08:00 EEST, when investors will focus on Network Infrastructure growth, margins, and cost commentary. Nokia targets 12% to 14% Network Infrastructure sales growth this year, but current price action suggests 2026 execution outweighs the 2027 promise.
