Nokia’s AI Segment Surges 49% but the Stock Keeps Falling — July Earnings Will Settle the Score

Nokia shares slide nearly 20% in a month despite strong AI/cloud revenue growth and new partnerships with FiberCop and Google Cloud. Analysts remain divided on outlook, with targets ranging from €9.75 to €14.

Nokia is firing on all cylinders when it comes to deal-making and AI-driven growth, yet its shares continue to slide. The Finnish telecom equipment maker has inked partnerships spanning fiber-optic sensing, cloud integration and artificial intelligence in recent weeks, but the market remains unimpressed. On Wednesday the stock traded at €10.16, down 1.84% on the day and almost 20% lower than a month ago. That puts it roughly 32% below the 52-week high of €14.97 reached on June 3.

The latest initiative comes from Italy, where Nokia and fiber network operator FiberCop signed a memorandum of understanding to turn existing fiber cables into a monitoring platform. The technology, drawing on Nokia’s Bell Labs research and AI-powered analytics, is designed to detect wind, temperature shifts, earthquakes, floods and leaks, as well as predict outages before they happen. Testing will begin in FiberCop’s laboratories and on isolated cable sections. John Harrington, Nokia’s head of European business, said AI is “radically changing what networks must deliver” and that the combination of Bell Labs know-how with AI-driven fiber sensing would give FiberCop an intelligent surveillance platform. FiberCop, originally a joint venture between Telecom Italia and KKR launched in 2021, became fully independent in 2024.

The FiberCop deal follows a broader push into AI and cloud that has produced strong operational numbers. In the first quarter, Nokia’s revenue rose 4%, with the AI and cloud solutions segment surging 49% — now representing 8% of total group revenue. The company booked over €1 billion in orders in that area alone. Network infrastructure expanded 6% as well, prompting management to raise its growth forecast for the networks unit to 12-14%, with optical networks expected to climb as much as 20%.

Nokia has also deepened ties with Google Cloud, planning to integrate Google’s Gemini models into its Nokia Assurance Center software. Six specialized AI agents will help telecom operators cut costs and automate problem resolution, with a commercial launch as a SaaS offering on the Google Cloud Marketplace scheduled for September 2026. Despite these announcements, the stock has failed to catch a bid.

Analysts remain split on the outlook. Danske Bank upgraded to “Buy” with a €14 target, while UBS holds at “Neutral” with €11. LBBW downgraded to “Sell” and sees fair value at €9.75. The technical picture is equally mixed: Nokia trades 15.88% below its 50-day moving average of €12.08 but still 33.47% above the 200-day line of €7.61. The relative strength index of 36.7 points to waning momentum without entering oversold territory, and annualized volatility of 72.3% confirms trading has become markedly choppier.

Management’s full-year guidance calls for operating profit between €2.0 billion and €2.5 billion, with the board expecting the upper half of that range. The market, however, is waiting for proof that the strong order intake in cloud and AI is translating into revenue and margin improvement. All eyes are now on July 23, when Nokia reports second-quarter and first-half results. That report will determine whether the strategic pivot is gaining traction or remains, for now, a collection of promising headlines.