Nokia Insider Loads Up on Shares as 129% Rally Meets 53x Earnings Test

Nokia's CDO buys €1.1M shares after AI-fueled 129% gain; stock trades at 53x earnings, analysts see 30% downside. Q1 profit jumps 54%.

A top Nokia executive has bet €1.1 million on the stock just as the market begins to question whether the company’s AI-driven surge has run ahead of fundamentals. Chief Development Officer Konstanty Owczarek bought €500,000 worth of shares on May 24 and followed with a €600,000 purchase on May 26, the same day the stock hit its 52-week high of €14.14. The insider vote of confidence comes at a delicate moment: the Helsinki-listed shares slipped 2.33% to €12.77 on Friday, posting a weekly decline of over 4% and sitting nearly 10% below that peak.

The pullback follows a breathtaking run. Since January, Nokia has gained 129%, fueled by its repositioning from a traditional telecom equipment supplier to a builder of optical networks and AI infrastructure for hyperscale data centers. The shift accelerated with last year’s acquisition of Infinera and a $1 billion investment from Nvidia in AI-RAN technology. Analysts have taken notice: Morgan Stanley lifted its price target to €14 with an Overweight rating, while Deutsche Bank set a more cautious target of €8.50 but maintained a Buy rating.

The financial results give some weight to the optimism. In the first quarter of 2026, comparable net sales rose 4% to €4.5 billion, and comparable operating profit jumped 54% to €281 million, pushing the operating margin from 4.2% to 6.2%. The AI and cloud segment grew 49%, optical networks added 20%, and Nokia booked €1 billion in orders from AI and cloud clients. Management raised its 2026 growth forecast for network infrastructure to 12–14%, with optical and IP networks together targeting 18–20% growth.

Yet the valuation has become a sticking point. At the current price, Nokia trades at 53 times estimated 2026 earnings and 42 times 2027 estimates. Twenty-three analysts see fair value at an average of €9.38 — roughly 30% below Friday’s close. Technical indicators offer little clarity: the 50-day moving average sits at €9.64, the 200-day at €6.42, and the relative strength index at 52.1 points to a neutral posture after the steep ascent.

Not every part of the business is firing on all cylinders. Fixed-network sales shrank 13% in the first quarter, and new optical networking products unveiled in March won’t enter pilot production until mid-2027, with mass production starting in the second half of that year. Nokia also plans capital expenditures of €900 million to €1 billion in 2026, mainly for additional optical manufacturing capacity and real estate.

CEO Justin Hotard has streamlined the company into two core segments — AI and cloud networking — and set a full-year comparable operating profit target of €2.0–2.5 billion for 2026, with an ambition to reach €2.7–3.2 billion by 2028. The broader market backdrop is supportive: hyperscale cloud providers are expected to push their combined network spending past $700 billion in the near term. Insider buying and institutional upgrades have provided a floor, but the next major test arrives on July 23, when Nokia reports second-quarter results. That report will reveal whether the order pipeline and margin trajectory can validate a share price that has already priced in years of growth.