Nokia’s Contradictory Path: Retro AI Button Phones and a Billion?Dollar Bet on Defense

Nokia stock slips 11.8% below its 50-day average, as retro AI phones and a $1B Nvidia defence pivot drive a 49% jump in AI cloud revenue.

Nokia’s stock tells a story of extremes. After a blistering 150% rally over the past twelve months, the shares have cooled sharply in recent weeks, slipping 11.8% in the last month alone. At €11.01, the equity now trades 8.6% below its 50?day moving average of €12.05 — a signal that the short?term momentum has faded. Yet the 14?day RSI at 42.6 suggests the sell?off has not reached oversold territory, leaving room for both bulls and bears to make their case.

The contrasting pressures on the stock mirror the company’s own strategic split. On one side, Nokia is leaning into its nostalgic roots with a fresh line of feature phones equipped with a physical artificial?intelligence button. On the other, it is aggressively pivoting toward the defence sector and next?generation AI infrastructure, bolstered by a $1?billion investment from Nvidia.

Retro Handsets Get a Voice?Assisted Brain

Lizenznehmer HMD Global has unveiled four new 4G?enabled devices — the Nokia 235 4G, 215 4G, 210 4G and 200 4G — aimed at budget?conscious global markets. The headline feature is a dedicated key that launches a voice?activated assistant called Sikey AI. Users can command it to turn on the flashlight, open the camera, set alarms or place calls. All four run on the S30+ operating system, include USB?C charging and pack a removable 1,450?mAh battery.

The screens vary by model. The Nokia 200 4G and 210 4G sport 2.4?inch QVGA displays, while the 215 4G and 235 4G step up to larger 2.8?inch IPS panels. Sikey AI is free for the first 180 days; after that a subscription model kicks in, managed through a separate smartphone or a PC. Pricing starts at $29 for the Nokia 200 4G, with full details and release dates for the other models still pending.

A $1?Billion Nvidia Bet and a NATO?Backed Pivot

While the retro phones grab headlines, the real engine of Nokia’s transformation lies elsewhere. The company is increasingly positioning itself as a supplier of sovereign defence infrastructure. Over the weekend, it attended the NATO armament forum at the alliance’s invitation, and Ukrainian forces are currently testing Nokia’s 5G technology for secure battlefield communications. Analysts are watching for concrete procurement contracts, which could emerge at the next NATO summit.

At the same time, Nokia is deepening its involvement in the AI?infrastructure boom. At an industry event in South Korea in early July, management outlined its vision for intelligent radio networks essential for data?hungry AI applications. The cornerstone of this push is a strategic partnership with chip giant Nvidia, which invested $1 billion in Nokia at the end of October 2025. Together they are developing new radio?network architectures designed to underpin the global AI ecosystem.

The pivot is already showing up in the numbers. In the first quarter, Nokia’s AI and cloud division posted a 49% revenue jump and secured new orders worth over €1 billion. The optical?networks segment, buoyed by demand from massive data centres, grew by a fifth. Management is targeting an operating profit of up to €2.5 billion for the full year 2026, and the market will get its first big test on 23 July, when the company reports second?quarter earnings.

Balancing the Old and the New

The immediate impact of the Sikey?equipped handsets on Nokia’s bottom line remains uncertain, given that HMD Global — not Nokia itself — drives the feature?phone business. Still, the devices underscore Nokia’s ability to leverage its brand in low?end segments while the company simultaneously chases high?margin defence and AI contracts. The share price’s recent retreat from its 52?week high of €14.97, reached on 3 June, has been steep — a 26.5% drawdown — but the distance from the August 2025 low of €3.49 highlights just how far the stock has travelled.

For now, Nokia’s shares occupy a neutral technical zone. The narrative is split between a nostalgic hardware play and a high?stakes infrastructure gambit, and the July earnings report will provide the clearest evidence yet of which story investors should believe.