Nokia’s €2.8 Billion AI Order Haul: A Boom That Markets Are Refusing to Celebrate

Nokia's AI and cloud orders hit €2.8B in Q2, but supply chain bottlenecks and delayed revenue conversion drive a 30% stock drop, with dividends and oversold signals offering little relief.

The numbers are stunning. Nokia booked €2.8 billion in new orders from AI and cloud clients in the second quarter, while revenue from that segment more than doubled to €446 million. Yet the stock has been in freefall, shedding roughly 30% over the past month and closing at €8.14 on Monday — a meager 0.99% gain that barely interrupted the slide.

The disconnect between Nokia’s operational momentum and its market performance has become the defining narrative around the Finnish telecom equipment maker. Investors aren’t ignoring the growth; they’re questioning how quickly it can translate into cash.

The Supply Chain Bottleneck That Changes Everything

CEO Justin Hotard has been candid about the industry’s biggest headache: memory chip shortages. He expects these constraints to persist until at least 2027, and Nokia itself warns that capacity limitations could delay deliveries into 2028. That timeline is critical because only about half of the €2.8 billion in AI and cloud orders is expected to convert into revenue within the next twelve months. The rest stretches further out — and markets are punishing that time lag.

This isn’t unique to Nokia. Across the AI hardware supply chain, the pattern repeats: order books swell, growth rates look spectacular, and stocks get hammered. The reason is straightforward — until those orders turn into cash flow, they remain promises, not profits. In a market that has grown impatient with “payment follows later” narratives, a delay of one to two years is read as risk, not reassurance.

A Dividend Day Arrives Amid the Chaos

Tuesday marks the record date for Nokia’s quarterly dividend of €0.04 per share, with payment scheduled for August 6. For shareholders who have watched the stock plunge from its 52-week high of €14.97 on June 3 — a drop of nearly 47% — that small payout offers little comfort.

The technical picture is equally mixed. The stock now sits 3.59% above its 200-day moving average of €7.86, a line that has historically acted as support during pullbacks. The 14-day relative strength index stands at 30.6, just above the oversold threshold of 30. That’s normally a buy signal for bargain hunters, but so far, the argument isn’t gaining traction. The annualized 30-day volatility has surged to 66%, a level more typical of biotech stocks than a former defensive telecom equipment supplier.

Restructuring Costs Mask Underlying Strength

Nokia’s second-quarter results tell a story of two realities. On a reported GAAP basis, the company posted an operating loss of €50 million, dragged down by €390 million in restructuring charges as it continues to streamline its organization. But on an adjusted basis, earnings per share came in at €0.07, well above the €0.04 analysts had expected.

Total revenue rose 8% to €4.82 billion. The mobile infrastructure unit remains the largest revenue generator at €2.68 billion, but the network infrastructure segment — covering optical and IP networks — is growing faster, with constant-currency sales up 12%, driven by a 20% jump in optical networks and 16% in IP networks.

The company also technically adjusted its 2026 profit guidance. The expected adjusted operating profit now stands at €2.1 billion to €2.6 billion, a change driven by the reclassification of two smaller business units — fixed wireless access CPE and enterprise campus edge — as discontinued operations. This is an accounting shift, not a fundamental deterioration.

The Real Test Lies Ahead

Despite the brutal month, Nokia shares are still up 45.62% year-to-date and have gained 116% over the past twelve months. That context matters: the stock’s dramatic re-rating as an “AI infrastructure play” hasn’t been entirely unwound, even if the recent sell-off has erased a significant chunk of those gains.

On platforms like Stocktwits, retail investor sentiment flipped from “bullish” to “extremely bullish” within a single day, while discussion volume surged 254%. That volatility in sentiment mirrors the stock’s price swings — a stock caught between an intact long-term story and short-term panic.

Nokia is preparing commercial pilot projects for AI-RAN, aiming to integrate artificial intelligence directly into 5G and future 6G networks, with launches expected by the end of 2026. The order book is real. The demand is robust. But until supply chain bottlenecks ease and those orders convert into cash, Nokia’s stock will remain hostage to a market that wants proof — not promises.