Nokia Balances Equity Plan Payouts Against a Cash-Flow Test

Nokia moved 847,057 of its own shares to participants in its equity-based incentive programmes on Thursday, handing the stock over free of charge and settling obligations the company had already booked. The transfer traces back to a board resolution announced on 2 October 2025, so it executes a commitment made well before this week rather than breaking new ground.

Following the allocation, Nokia still holds 80,314,659 treasury shares. Recipients pay nothing for the stock they receive. The disclosure is essentially a housekeeping item — the company drawing down its own share inventory to honour promises already made to employees.

What matters more for anyone weighing the equity is whether Nokia can convert its runaway AI and cloud order book into actual cash. Results for the third quarter of 2026, published roughly three weeks ago, show the demand side firing on all cylinders: revenue from AI and cloud customers jumped 123% year on year in constant currency, while order intake climbed 118%. Orders from that customer group reached EUR 1.5 billion in the quarter.

Free cash flow, though, came in at minus EUR 99 million. That gap between booming demand and negative cash generation is the crux of the investment case — the backlog supports the growth story only if Nokia can turn bookings into revenue and, eventually, into liquidity.

Management has given the market a yardstick for that conversion. For 2027, it expects Optical and IP Networks combined to grow 25–30%.

Separately, Hotwire Communications has picked Nokia to build a next-generation network in North Carolina. The network, designed to be ready for AI-era architectures, is scheduled to go live in early 2027, Nokia said on Wednesday. The stock rose 3.5% on Friday to close at EUR 7.00.

Credit quality has improved alongside the order book. Moody's Ratings lifted Nokia's long-term issuer rating and its senior unsecured debt rating from Ba1 to Baa3 just over a week ago, keeping a positive outlook. The agency pointed to demand for cloud and AI infrastructure as the rationale.

Jefferies, for its part, reaffirmed its buy rating on 2 November and stuck with a EUR 13.80 price target. Both the rating and the target were left untouched in that analyst note.

Nokia also used its network traffic report to sketch out the longer-term picture, projecting that artificial intelligence will account for 44% of global network traffic by 2035 — a forecast for worldwide data flows rather than for Nokia's own volumes.

On the technology front, AT&T and AST SpaceMobile reported on 21 October a successful handover between a terrestrial mobile network and a satellite network providing direct-to-device connectivity. By their account, it was the industry's first successful transition of its kind. Nokia supplied the radio access equipment and mobility software for AST SpaceMobile's network. That test covered the switch between the two network types, a different piece of work from the Hotwire build, which will not be operational until early 2027.