Nokia’s Chip Warning Casts a Shadow Over a Record AI Order Book

Nokia's AI and cloud revenue doubles, but a memory chip shortage warning triggers a 33% monthly stock slide, testing key technical support.

The numbers coming out of Nokia’s latest quarterly report read like a textbook turnaround story. Revenue from AI and cloud infrastructure more than doubled. New orders in that segment hit a record €2.8 billion. Operating profit climbed 18 percent to €434 million. Yet the stock has been hammered, shedding 6.32 percent on Friday alone to close at €8.06. Over the past 30 days, the shares have lost roughly a third of their value — a 33.53 percent slide that has wiped out the bulk of the gains from the earlier AI rally.

The disconnect between operational performance and market reaction is stark, but it has a clear explanation. On the earnings call, CEO Justin Hotard warned that a shortage of memory chips could persist through 2027. The very AI boom that is flooding Nokia with orders is also creating supply constraints for the components needed to fulfill them. Investors, it seems, are pricing in the risk of a production bottleneck rather than celebrating the demand surge.

A Technical Test Looms

The sell-off has brought Nokia to a critical technical juncture. Friday’s close leaves the stock just 2.84 percent above its 200-day moving average of €7.84 — a level that traders traditionally treat as the dividing line between a long-term bull and bear market. A decisive break below that threshold could accelerate the selling pressure.

There are, however, signs that the rout may be exhausting itself. The 14-day relative strength index has dropped to 29.5, firmly into oversold territory. Historically, such readings have often preceded a stabilization or even a relief rally, particularly when the fundamental outlook is improving. Nokia’s management recently lifted its 2026 operating profit guidance to a range of €2.1 billion to €2.6 billion, a modest upward revision that the market has so far chosen to ignore.

The Paradox of Progress

Nokia finds itself in an unusual position. Its pivot from traditional telecom infrastructure toward AI and cloud networking is gaining traction. The company has acquired a chip fabrication campus in Arizona and expanded its 5G partnership with Taiwan Mobile. The transformation is real and measurable. But the execution risks are equally tangible: supply-chain constraints, uneven order flows, and rising restructuring costs that the company now expects to reach €800 million by 2026.

The stock’s trajectory over the past year illustrates the volatility inherent in this transition. From a 52-week low of €3.45 last August, Nokia surged to nearly €15 in early June — a gain of more than 300 percent. Even after the recent correction, the shares are still up 44.19 percent year-to-date and 116.90 percent over the trailing twelve months. The sell-off has erased roughly 46 percent from the June peak, but the longer-term trend remains intact.

What Comes Next

For value-oriented investors, there is a small psychological anchor on the horizon. On July 28, the stock will trade ex-dividend for the recently announced quarterly payout of €0.04 per share. The amount is modest, but it marks a moment when the narrative shifts from price action to cash returns.

The real test, however, will be whether Nokia can hold above its 200-day moving average and begin to rebuild momentum. Until that happens, the burden of proof rests with the buyers. The company’s AI story is producing real orders and real revenue growth, but the market is demanding evidence that those gains can be delivered without being choked off by component shortages. That question is unlikely to be resolved in a single trading session — or even a single quarter.