Nokia’s Twin Transformations: ERP Overhaul and Battlefield AI as the Stock Digests a Triple-Digit Rally

Nokia shares retreat 14% from highs but stay up 97% YTD. The company pursues dual transformations: migrating ERP to Azure with SAP and expanding AI defense partnerships with NestAI for NATO systems.

Nokia’s shares are taking a breather after a blistering 12-month run that saw the stock more than double, even as the Finnish network equipment maker pushes ahead with two distinct corporate overhauls — one aimed at modernising its internal backbone, the other at planting a flag in the defence?tech market.

The stock closed Friday at €10.96, roughly 27% below the 52?week high of €14.97 touched on 3 June 2026. The pullback has been sharp: the shares have shed more than 14% over the past month and are hovering about 10% beneath their 50?day moving average of €12.09. The relative strength index sits at 44.8, a neutral reading that suggests neither panic buying nor capitulation is driving the move. Volatility remains extreme — the 30?day annualised figure tops 72% — reflecting the market’s jittery embrace of a stock still up nearly 97% year?to?date and roughly 160% over 12 months.

Against that backdrop, Nokia is executing two largely back?office and forward?looking initiatives that, while unlikely to move the needle on a daily basis, collectively underscore a pivot from legacy telecom gear supplier toward a broader infrastructure and software play.

Late in 2025, Nokia struck a multi?year partnership with SAP and Microsoft to migrate its entire SAP S/4HANA environment to Azure. The deal, structured under SAP’s RISE methodology, gives Nokia a turnkey roadmap for shifting its ERP landscape — covering processes, data, applications and operating models — entirely into the cloud. SAP will run the software; Microsoft’s cloud will provide the underlying scale, security and global reach. Nokia’s own IT team can then focus on business outcomes rather than hardware maintenance. Manos Raptopoulos, SAP’s president for customer success in Europe, Asia?Pacific, the Middle East and Africa, described the approach as a clear path to a modern ERP core with a stable foundation.

Separately, Nokia has deepened its ties with the Finnish AI defence start?up NestAI, a relationship that began with a joint €100 million investment between Nokia and state?backed fund Tesi in November 2025. The expanded collaboration now targets bespoke communication systems for NATO forces — equipment designed to function under electronic jamming and drone threats. The core technology combines Nokia’s integrated sensor and communications kit with NestAI’s multi?sensor tracking for earlier threat detection, while Nokia’s mobile 5G networks are linked to NestOS, the start?up’s adaptive battlefield operating system. That platform is meant to keep command units connected even when fixed infrastructure is down and to support autonomous systems such as drones. Nokia is also feeding its own radio?network planning models into NestOS so that commanders can factor connectivity into mission planning from the outset.

The dual push fits a broader strategy: Nokia is positioning itself as a supplier of AI infrastructure and defence technology. The 2024 acquisition of Infinera helped boost its share of the U.S. optical?networks market from 6.3% to 27.3% in 2025, a leap that signals its emergence as a serious infrastructure player. The defence tie?up, meanwhile, taps into rising European defence budgets that increasingly favour sovereign AI capabilities.

At the market level, the stock’s recent retreat comes after an extraordinary rally that dragged it up from a 52?week low of €3.45 on 1 August 2025 — a move that has still left it more than triple that level. The market capitalisation now stands at roughly €60.8 billion. While the shares have slipped below the 50?day average, they remain more than 44% above the 200?day moving average of €7.58, a sign that the long?term trend remains firmly intact.

Neither the SAP cloud migration nor the NestAI partnership is likely to produce immediate earnings fireworks. The ERP overhaul targets cost structure and process efficiency in the back office, not sales growth. The defence deal may take several quarterly reports before the first material orders appear. But together they paint a picture of a company trying to remake itself from the inside out — and from the front lines of the next?generation battlefield. Investors, after banking a near?doubling of their money this year, appear content to wait and see how quickly those changes translate into hard numbers.