Nokia's nine percent

Both halves of the question are true

Nokia's ADR closed at USD 9.84 on 15 September 2026. The lowest close in the price record kept here, which begins on 8 July 2024, is USD 3.62 on 18 July 2024; the highest is USD 16.85 on 2 June 2026 ^[4]. That is a 4.7-fold move in twenty-three months, and then a fall of 42% from the peak in the fifteen weeks since. Over one year the stock is up 116%. Over three months it is down 30% ^[4].

So the surge is real and datable, and so is the unwind. The useful question is not which of the two is the trend. It is what the market bought, what it has since been handed, and whether the second thing can grow into the first.

What the surge was for

Two things happened to Nokia in 2025 that had not happened to it in a decade.

The first was Infinera. Nokia closed the acquisition on 28 February 2025 and folded it into Optical Networks ^[1]. The effect on that unit was immediate: Optical Networks net sales went from EUR 1,636 million in 2024 to EUR 3,019 million in 2025, an 85% increase of which the acquisition contributed EUR 1,273 million ^[1]. It bought reach into a customer set Nokia's radio business never had. The 20-F states that nine of the world's top ten hyperscalers use Nokia's optical networks, and puts Nokia's serviceable addressable market with AI and cloud providers at EUR 17 billion in 2025, up 28% year on year ^[1].

The second was NVIDIA. In October 2025 Nokia's board resolved on a directed issue of 166,389,351 new shares at USD 6.01 apiece, delivered to NVIDIA as ADSs in November, raising USD 1.0 billion ^[1]. Against 5,742,239,696 shares issued and outstanding at year end that is 2.9% of the company ^[1]. The money came with an AI-RAN partnership: NVIDIA's ARC-Pro platform inside Nokia's Cloud RAN and AirScale basebands, with T-Mobile US, SoftBank, Indosat Ooredoo Hutchison and KDDI named as the operator partners ^[1]. On 28 October 2025, the day of the announcement, the ADR rose 22.2% on 378 million shares — roughly nine times its ordinary volume ^[4].

Six weeks later, on 19 November 2025, a new chief executive presented a new strategy at a Capital Markets Day in New York, and Nokia collapsed four business groups into two primary segments effective 1 January 2026: Network Infrastructure, framed as the growth segment for the data-centre build-out, and Mobile Infrastructure. A third bucket, Portfolio Businesses, was created to hold units the company no longer considers core — fixed wireless access CPE, site implementation and outside plant, enterprise campus edge and microwave radio — "while the company assesses the best value creating opportunity for them" ^[1].

That is a complete re-rating case: new assets, a strategic shareholder with the most credible name in the industry, a new CEO, and a new organisational chart drawn around the thing the market wants to own.

The business underneath it

Nokia's four 2025 segments were not equally profitable, and the gap between them is the whole company ^[1].

• Nokia Technologies (patent licensing): net sales EUR 1,501 million, segment operating profit EUR 1,059 million — a 70.6% margin.
• Network Infrastructure (optical, IP, fixed): net sales EUR 7,986 million, operating profit EUR 780 million — 9.8%.
• Cloud and Network Services: net sales EUR 2,606 million, operating profit EUR 338 million — 13.0%.
• Mobile Networks (radio): net sales EUR 7,806 million, operating profit EUR 220 million — 2.8%.

Licensing is 7.5% of sales and 52% of total segment operating profit. Radio is 39% of sales and 11% of it. That imbalance is the durable fact about Nokia, and it has nothing to do with AI.

The licensing asset is genuinely deep: more than 26,000 patent families, over 8,000 of them declared essential to 5G, and more than 250 licensees including Apple, Samsung, Lenovo and Mercedes-Benz ^[1]. The 20-F notes that the portfolio's strength has let Nokia secure "the vast majority" of its agreements without litigation ^[1]. It also states the boundary plainly: annual contracted recurring revenue of over EUR 800 million is secured through 2030 ^[1]. Against EUR 1,501 million of 2025 licensing sales, roughly half the engine is contracted for the rest of the decade and the other half has to be renewed.

The equipment units are ranked but not walled. The filing claims a leading core-network position with Nokia technology present in 65% of telecom providers' 5G standalone networks; the global number one in xPON OLT for a sixth consecutive year; number one in IP edge routing; number two in optical; and third in global mobile RAN share, each footnoted to Omdia or Dell'Oro ^[1]. What the filing does not claim anywhere in the equipment portfolio is a switching cost, a contractual lock, or an installed-base advantage. It does describe the market it sells into as subject to "equipment price erosion and aggressive price competition" ^[1]. Rankings in a market like that are positions, not moats.

Where the profit goes

Nokia's four segments plus Group Common and Other produced EUR 2,024 million of segment operating profit in 2025. The group reported EUR 885 million ^[1]. The EUR 1,139 million in between is disclosed line by line: restructuring and associated charges EUR 478 million, amortisation and depreciation of acquired intangibles and property EUR 444 million, release of acquisition-related fair-value adjustments EUR 88 million, a provision for contractual claims EUR 66 million, and EUR 63 million of other items ^[1].

The same bridge exists in every year the filing shows. Restructuring charges were EUR 356 million in 2023, EUR 445 million in 2024 and EUR 478 million in 2025 ^[1]; Nokia now expects EUR 800 million of them in 2026 ^[2]. A charge that appears every year for four consecutive years, rising, is a cost of doing business under a different name. The measure Nokia guides on and pays its executives on excludes it.

What reaches the shareholder reflects the reported number, not the comparable one. Basic earnings per share for 2025 were EUR 0.12, against EUR 0.23 in 2024. The proposed dividend is EUR 0.14 — more than the year earned. Return on shareholders' equity was 3.1%, return on capital employed 4.3%, and free cash flow EUR 1,465 million ^[1]. Net sales were EUR 21,138 million in 2023 and EUR 19,889 million in 2025 ^[1]; the longer series on this site puts 2016 above EUR 23 billion ^[4]. This is a company whose revenue has been flat to shrinking for a decade, and 2025 was its weakest operating margin in five years at 4.4%, down from 10.2% ^[1].

The nine percent

Nokia's Q2 2026 report, published 23 July 2026, breaks net sales down by customer type. The quarter was EUR 4,815 million, and it split like this ^[2]:

• Telecommunication Providers: EUR 3,514 million, up 3%
• Mission Critical Enterprise and Defense: EUR 448 million, down 3%
• AI & Cloud: EUR 446 million, up 103%
• Technology Licensees: EUR 407 million, up 14%

The AI and cloud line is real, it is doubling, and it is 9.3% of sales. Telecom operators, growing 3%, are still 73%. For the half year the AI and cloud figure is EUR 793 million out of EUR 9,248 million ^[2].

The forward number is better than the current one. Nokia reported EUR 2.8 billion of AI and cloud order intake in the quarter — more than six times that quarter's AI and cloud revenue — and expects around half of it to convert to revenue over the following twelve months, with supply, not demand, named as the binding constraint ^[2]. That is roughly EUR 1.4 billion of incremental revenue arriving against a group base near EUR 19 billion.

Now the part the price has been arguing with. In the same quarter, Nokia's reported operating result was a loss of EUR 50 million, against a EUR 147 million profit a year earlier, a 430 basis point decline the company attributes to a faster pace of restructuring. Reported diluted EPS was EUR 0.00. Profit for the period was EUR 5 million ^[2]. Comparable operating profit was EUR 434 million, up 18%.

And the segments, on the new structure: Network Infrastructure — the AI segment — earned EUR 166 million on EUR 2,037 million of sales, an 8.1% margin. Mobile Infrastructure earned EUR 310 million on EUR 2,680 million, against EUR 310 million in the same quarter a year earlier ^[2]. The legacy business, unchanged, out-earned the growth business roughly two to one.

Full-year guidance moved from EUR 2.0–2.5 billion of comparable operating profit to EUR 2.1–2.6 billion, and Nokia is explicit that the change is a EUR 0.1 billion technical revision from reclassifying two Portfolio Businesses units as discontinued operations: "Operationally, Nokia's full year outlook is unchanged" ^[2]. AI and cloud revenue doubled, order intake hit EUR 2.8 billion, and the group profit number did not move.

What the last fifteen weeks were

Two days account for most of the fall from the peak. On 5 June 2026 the ADR fell 13.5%; on 14 September 2026 it fell 13.3% on 126 million shares, the heaviest volume since the NVIDIA announcement ^[4].

Neither was a Nokia event. The only document Nokia filed with the SEC on 5 June was a stock exchange release announcing a EUR 500 million senior unsecured note issue ^[3]. On 14 September it filed nothing at all.

What those days were is visible across this site's own price record for the same sessions ^[5]. On 14 September, against a universe average of −3.8% with 130 of 168 names down: Corning −13.7%, Nokia −13.3%, Coherent −12.7%, Astera Labs −11.7%, Lumentum −9.9%, Ciena −8.6%, Credo −7.9%, Fabrinet −7.7%, Marvell −7.3% — and Cisco, the enterprise-networking name, −1.9%. On 5 June, against a universe average of −6.7%: Marvell −16.7%, Nokia −13.5%, Fabrinet −13.1%, Astera Labs −11.5%, Coherent −10.6%, Corning −10.2% ^[5].

Nokia now falls with the optical and interconnect complex and not with the networking incumbents. That is the clearest available evidence of what the market decided Nokia is. It is also why a stock whose largest customer line is telecom capex has spent three months trading on the sentiment of a data-centre build cycle — and why, on 23 July, an earnings beat was met with a 6.5% decline ^[4].

What has to be true from here

Take the arithmetic at the company's own exchange rate. Nokia's 2026 outlook assumes EUR:USD of 1.14 ^[2]. The market capitalisation in this site's record is USD 55.1 billion ^[4], or about EUR 48.3 billion; net cash and interest-bearing financial investments were EUR 2,776 million at 30 June ^[2]. That puts enterprise value near EUR 45.6 billion against a guided comparable operating profit midpoint of EUR 2.35 billion — roughly 19 times. At the 2 June peak, on the same share count, it was about 34 times. And the denominator there is the measure that excludes EUR 800 million of restructuring charges; against reported operating profit, which was EUR 33 million for the first half of 2026 versus EUR 151 million a year earlier ^[2], the multiple does not resolve to a number worth printing.

So the bull case is not that Nokia is cheap. It is that EUR 2.8 billion of quarterly order intake, converting at 50% inside a year, compounds a 9% revenue line into something that changes the group — and that the restructuring line eventually stops, letting comparable and reported converge.

Three things in the record argue against that arriving soon. Telecom capex, growing 3%, is still three quarters of the business and dilutes everything the AI line does. Roughly half of the licensing engine — the only genuinely high-margin asset Nokia owns — is contracted only to the extent of EUR 800 million a year through 2030, and the rest renews on terms nobody outside the company can see. And from 1 January 2026, Technology Standards sits inside Mobile Infrastructure ^[1], so that 70%-margin profit stream is now reported blended with the 2.8%-margin radio business; the EUR 310 million segment line is the only view an outside reader gets.

One thing argues for it. Nokia said supply, not demand, is the constraint, and it raised 2026 capital expenditure guidance to EUR 800–900 million specifically to expand optical manufacturing capacity ^[2] — against EUR 606 million spent in all of 2025 ^[1]. Companies short of demand do not do that.

The price ran ahead of the revenue; the revenue is now arriving; the group profit has not moved. Whether the third follows the second is the entire investment question, and the next document that speaks to it is the Q3 report due 22 October 2026 ^[4]. The line to read is not the headline beat. It is the AI and cloud figure against EUR 446 million, the share of the EUR 2.8 billion that converted, and whether "somewhat above the midpoint" ^[2] becomes a different sentence.