Broadcom Shock Sinks Nokia 6% From 17-Year Peak, but AI Orders and New Mobile Chief Bolster the Bull Case

Nokia shares tumbled 6% on Broadcom's weak AI-chip forecast, but remain up 144% YTD on AI pivot and analyst upgrades. Q1 operating profit jumped 54%.

A single trading session wiped away weeks of momentum for Nokia investors. The Finnish networking group saw its shares tumble nearly 6% on Thursday to €13.60 after Broadcom’s disappointing AI-chip forecast ignited a sector-wide selloff. Just a day earlier, the stock had touched €14.97—a level not seen in 17 years. Over $300 billion in market value evaporated across the AI infrastructure complex as Broadcom’s post-market decline of more than 12% rattled confidence in richly priced momentum names.

The setback, however, masks a remarkable run that has reshaped how the market views Nokia. Since January, the stock has surged roughly 144%, and from its 52-week low of €3.49 it has more than quadrupled. Even after Thursday's drubbing, the shares remain up nearly 26% over the past 30 days. Behind that rally is a coordinated shift in analyst sentiment: Morgan Stanley raised its target to €14, Deutsche Bank to €8.50, and SEB Equities upgraded from Hold to Buy with an €8.90 price objective. Insider buying added further conviction—CEO Justin Hotard purchased around 84,000 shares in late April, and Victoria Hanrahan, the CEO’s chief of staff, snapped up over 22,000 NYSE-listed shares at roughly $16 each in May. Institutional investors followed suit: 341 funds expanded their Nokia holdings in the latest quarter, while FMR LLC—Fidelity’s parent—boosted its stake by 34.6%, crossing the 5% reporting threshold under Finnish law. Jane Street nearly decupled its position, increasing by roughly 920%.

The fundamental catalyst is Nokia’s pivot from a legacy telecom equipment supplier to a critical player in the AI economy. First-quarter 2026 comparable operating profit jumped 54% to €281 million, while revenue from AI and cloud customers climbed 49%. That prompted Hotard to raise the growth outlook for the network infrastructure division. The company also opened an AI Networking Innovation Lab in Sunnyvale, California, to optimize data-center networks for heavy AI workloads. On the defense front, Nokia Federal Solutions and Lockheed Martin jointly developed a modular 5G system for U.S. and allied forces, built on the CMOSS standard for direct integration into vehicles and platforms.

Yet the bull case comes with caveats. Fixed-network revenue has shrunk meaningfully, and lead times across the AI supply chain are lengthening. New optical products won't enter mass production until the second half of 2027. With a price-to-earnings ratio of nearly 96, the stock leaves no room for disappointment. Should cloud providers delay their capital expenditure, investor patience could fray quickly.

The next crucial test arrives on July 23, when Nokia reports second-quarter results. Management expects operating profit to land slightly above the midpoint of its target range of €2.0 billion to €2.5 billion. A potential promotion to the Euro Stoxx 50 in September could also attract fresh buyers later this year.

Underpinning the strategic transformation, Nokia has filled a key leadership gap. Effective September 1, 2026, Emma Falck will take the helm of the newly formed Mobile Infrastructure division and join the group executive board. She arrives from Siemens, where she oversaw the smart-building business, replacing a predecessor who left after an apparent strategic disagreement. The division had been temporarily managed by Hotard himself. With that appointment, Nokia closes one of its final open management questions—and signals that its pivot from a commoditized telecom play to an AI-and-defense infrastructure powerhouse is far from complete.