Nokia's AI Order Book Is Booming While Its Cash Conversion Target Gets Trimmed

Nokia's latest quarterly report card reads like two documents stapled together. On one page, Europe's telecom equipment maker is riding an artificial intelligence wave — comparable operating profit up 35% year on year to EUR 605 million, comparable sales ahead 9%, and revenue from AI and cloud customers surging 123% with orders up 118%. On the other, the company has just told investors it expects to turn less of its earnings into hard cash.

That second page is the one the market has been chewing on. On 22 October, Nokia cut its assumption for converting profit into free cash flow for 2026 to a range of 35% to 55%, citing additional working capital investments and an accelerated restructuring programme. The same day, it raised expected restructuring charges for the full year to EUR 1.1 billion. The third quarter of 2026 closed with negative free cash flow of EUR 99 million.

A Helsinki Slide With No Company-Specific Trigger

The stock's reaction has been uneven. Nokia shares were among the weakest performers in Helsinki on Friday, shedding 5.4% as a broad selloff in technology names swept the market. Reuters linked the mood to worries that rising artificial intelligence investment across the sector may not generate adequate returns. The decline coincided with losses across Finnish telecom, technology and basic materials stocks, and coverage of the session identified no company-specific catalyst behind the move — leaving the AI-returns anxiety as market background rather than a proven explanation for Nokia's slide on its own.

By the following session the picture had flipped: the shares were up 1.5% in pre-market trading.

Rosenblatt Securities weighed in on 23 October, trimming its price target to $14 from $15 while keeping a Buy rating. Analyst Mike Genovese called the post-earnings selloff overdone, pointing to the broader retreat in AI infrastructure names and concerns about credit default swap premiums at neoclouds and hyperscalers.

Guidance Holds Where It Counts

Through the noise, Nokia left its full-year comparable operating profit outlook untouched at EUR 2.1 billion to EUR 2.6 billion. Third-quarter revenue came in at EUR 5.154 billion. Management credited demand from AI and cloud customers with underpinning growth, and the order momentum in that segment suggests the top line has room to run.

The cash conversion cut, however, reframes how investors are likely to value those earnings. Media reports suggested the cash flow outlook, the restructuring programme and worries about procurement costs all weighed on the stock after the results landed.

Partnerships Stacking Up Across Three Continents

Nokia has hardly been idle on the deal front. On 21 October, the company and NVIDIA widened their collaboration on AI-driven radio access networks toward commercial deployment, and unveiled a joint sovereign platform for agent-based AI to automate telecom networks. Nokia pointed to progress involving BT, Deutsche Telekom, Elisa and Orange.

A day earlier, Nokia and SoftBank agreed a commercial AI-RAN field trial in Japan for 2027, running Nokia's anyRAN software on SoftBank's AITRAS platform. And on 22 October, Nokia and ICEYE signed a memorandum of understanding with Ukraine's defence ministry to explore cooperation on sovereign satellite communications.

The strategic story, in other words, is expanding on several fronts at once. Whether the cash follows is the question the next few quarters will have to answer.