Nokia Stock Caught in the Crossfire Between AI Promise and Market Turmoil

Nokia's AI revenue doubles but shares fall 32% amid tech rout, trading below key moving average with RSI signaling oversold conditions.

The disconnect between Nokia's strategic trajectory and its stock price has rarely been starker. The Finnish network equipment maker has emerged as a genuine contender in the artificial intelligence infrastructure race, yet its shares have been battered by a combination of company-specific headwinds and a broader technology sector rout that has swept across global markets.

The stock closed at €7.88 on Tuesday, shedding 3.24 percent in a single session, and has now fallen a staggering 32 percent over the past 30 days from its 52-week high of €14.97 reached on June 3. The slide has pushed the shares 2.06 percent below their 200-day moving average of €7.89 — a level many institutional investors view as the last line of defense for a long-term uptrend. The 14-day Relative Strength Index has dropped to 28.0, territory that typically signals oversold conditions and often precedes a technical bounce, but also underscores just how deeply the market's skepticism toward Nokia's capital-intensive transformation has taken root.

Tuesday's decline came with an additional technical twist: the stock traded ex-dividend, with Nokia's €0.04 quarterly payout mechanically reducing the share price. That adjustment, however, only partially explains the magnitude of the sell-off, which unfolded against a backdrop of severe stress across the technology landscape. South Korea's Kospi index plunged nearly 11 percent, the Philadelphia Semiconductor Index lost as much as 6 percent, and the Nasdaq-100 slid almost 10 percent from its record high as investors fled growth stocks amid mounting doubts about the profitability of Big Tech's massive AI spending. Nokia, whose business is increasingly tied to data center infrastructure, was swept up in the exodus.

A Tale of Two Quarters

The immediate catalyst for the recent pressure was Nokia's second-quarter earnings report on July 23, which painted a picture of a company in transition. Group revenue rose 8 percent year-on-year to €4.82 billion, while adjusted diluted earnings per share from continuing operations came in at €0.07. The headline numbers, however, masked a more complex reality.

On the positive side, Nokia's pivot toward AI infrastructure is gaining undeniable traction. Revenue from AI and cloud customers more than doubled, posting 105 percent growth. The company's partnership with Nvidia and the commercial launch of its AI-RAN platform have positioned it as a beneficiary of the billions flowing into data centers and high-capacity optical networks. JPMorgan maintained its Overweight rating on the stock and raised its price target for the New York-listed shares, while the broader analyst consensus remains predominantly a Buy.

Yet the cost of this transformation is weighing heavily. Nokia is in the midst of a painful restructuring of its legacy telecom equipment business, a process designed to free up resources for higher-margin growth areas. While adjusted margins improved, the reported figures suffered from an accelerated restructuring pace and a noticeable cash flow deficit. The company posted a negative operating margin, a jarring contrast for retail investors watching a company win the technology race for 6G and AI while simultaneously reporting deteriorating profitability.

Adding to the uncertainty, Nokia warned that memory chip supply constraints could persist into 2027, limiting planning visibility for the quarters ahead.

Insider Buying Meets Market Panic

While the broader market punished technology names indiscriminately, Nokia's management sent a different signal. According to Dagens Industri, company executives purchased shares during the AI-driven sell-off — a move often interpreted as a vote of confidence from those closest to the business. The insider buying has done little to stem the tide so far, but it adds a layer of context to the narrative of a management team that believes in its own strategy even as the market punishes the stock.

The longer-term perspective offers some relief. From its 52-week low of €3.45 in August 2025, the stock has more than doubled over twelve months. With a market capitalization of €44.27 billion, Nokia has transcended its identity as a pure-play telecom equipment maker and become a broad bet on AI infrastructure.

The technical setup now points to a potential turning point. The oversold RSI reading and the test of the 200-day moving average create a key zone where the next few trading sessions could determine whether buyers regain control or the sector-wide selling pressure continues to dominate. For investors, the fundamental question remains whether Nokia's AI business can generate cash quickly enough to fill the hole left by the shrinking legacy telecom market — a question that no amount of technical analysis can answer.