Nokia (NOK) AI Stock Analysis

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Nokia

(NYSE:NOK)

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Neutral 65 (OpenAI - 5.2)

Rating:65Neutral

Price Target:

$7.00

▲(11.29% Upside)

The score is driven primarily by solid financial performance (strong gross margin and revenue recovery with a conservative balance sheet) and a constructive earnings outlook with clear targets and strong optical/AI & cloud momentum. These positives are tempered by weaker cash-flow trends, near-term margin/integration pressures, soft-to-mixed technicals, and a high P/E relative to current profitability.

Positive Factors

High gross margin and revenue recovery

A sustained ~60% gross margin with a sharp rebound in revenue indicates structural product mix and cost efficiency advantages. This combination supports durable profitability expansion, funds R&D/product ramps, and strengthens competitive positioning across 5G, Optical and IP over the next several quarters.

Net cash position and conservative leverage

A multi-billion euro net cash balance and low debt-to-equity (0.21) provide financial flexibility to fund capex, absorb integration costs, and pursue strategic M&A without immediate refinancing risk. That balance-sheet strength supports multi‑year execution of optical and AI/cloud expansion plans.

Optical and AI & Cloud demand momentum

Concrete design wins and meaningful AI/cloud order share reflect a structural demand shift to higher‑capacity optical/IP products. Continued 800G ZR product ramp and strong book-to-bill support a durable growth runway in AI/datacenter networking, a higher‑value end market over coming years.

Negative Factors

Weaker cash generation trends

Declining FCF growth and low operating‑cash to net‑income conversion signal weaker cash conversion despite net cash. If persistent, this constrains self‑funding of CapEx and integration costs, may force higher cash tax/outflow scrutiny, and reduces buffer for longer term strategic investments.

Margin pressure from acquisitions and investments

Integration, restructuring and elevated R&D/CapEx to scale optical manufacturing impose multi‑quarter margin dilution. While management targets margin expansion by 2028, near‑term profitability may be constrained as synergies and ramps take time, limiting free cash build in 2–6 months.

Nokia Technologies decline and impairment

A material decline and impairment in the licensing arm reduces a historically recurring income stream and increases earnings volatility. Structural weakening here undermines diversification, requiring new licensing deals or restructuring to restore a stable, higher‑margin revenue contribution over time.

Nokia (NOK) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$37.65B

Dividend Yield2.26%

Average Volume (3M)24.57M

Price to Earnings (P/E)38.4

Beta (1Y)0.36

Revenue Growth5.05%

EPS Growth115.92%

CountryUS

Employees78,434

SectorTechnology

Sector Strength88

IndustryCommunication Equipment

Share Statistics

EPS (TTM)0.19

Shares Outstanding5,742,239,700

10 Day Avg. Volume31,912,236

30 Day Avg. Volume24,572,076

Financial Highlights & Ratios

PEG Ratio0.20

Price to Book (P/B)1.13

Price to Sales (P/S)1.22

P/FCF Ratio11.57

Enterprise Value/Market Cap0.73

Enterprise Value/Revenue1.37

Enterprise Value/Gross Profit3.11

Enterprise Value/Ebitda10.12

Forecast

1Y Price Target

$7.64

Price Target Upside21.50% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering5

EPS Forecast (FY)N/A

Revenue Forecast (FY)N/A

Nokia Business Overview & Revenue Model

Company DescriptionNokia Oyj provides mobile, fixed, and cloud network solutions worldwide. The company operates through four segments: Mobile Networks, Network Infrastructure, Cloud and Network Services, and Nokia Technologies. It offers products and services for radio access networks covering technologies from 2G to 5G, and microwave radio links for transport networks. The company provides fixed networking solutions, such as fiber and copper-based access infrastructure, and cloud and virtualization services, as well as wi-fi portfolio, including mesh solutions and cloud-based controllers; IP routing solutions for IP aggregation, and edge and core applications for residential, business, mobile, and industrial services; a portfolio of optical networks comprising portfolio coherent optical transponders, optical transport network switchers, wavelength-division multiplexers, reconfigurable optical add-drop multiplexer solutions, and optical line systems for metro access and aggregation, data center interconnect, regional, and long-haul/ultra-long-haul applications; and submarine networks. In addition, it offers business applications software, cloud and cognitive services, core networks software, and enterprise solutions. Further, the company provides hardware, software, and services, as well as licensing of intellectual property, including patents, technologies, and the Nokia brand. It serves communications service providers, webscales, hyperscalers, digital industries, and government. Nokia Oyj was founded in 1865 and is headquartered in Espoo, Finland.

How the Company Makes MoneyNokia generates revenue through multiple streams. The primary revenue source is its Networks segment, which includes sales of hardware (like base stations and network equipment), software, and managed services to telecom operators and enterprises. The company benefits from the ongoing global rollout of 5G networks, which drives demand for its cutting-edge solutions. Additionally, Nokia earns significant income through its Nokia Technologies division, which licenses its patents to other companies in the telecommunications and electronics industries. This includes royalties from licensing agreements with smartphone manufacturers and other technology firms. Strategic partnerships with major telecommunications companies and industry collaborations also play a crucial role in enhancing Nokia's market presence and revenue potential. Furthermore, the company invests in research and development to innovate and expand its service offerings, ensuring a steady pipeline of revenue-generating products.

Nokia Key Performance Indicators (KPIs)

Any

Gross Profit by Segment

Gross Profit by Segment
Shows profit after direct costs for each business unit, revealing efficiency and pricing power across different segments.

Chart InsightsNokia's Network Infrastructure and Cloud and Network Services segments show resilience with recent growth, driven by strong demand and strategic deals. However, Mobile Networks faces challenges, reflected in declining profits due to past revenue recognition and external pressures like currency fluctuations and tariffs. Despite these hurdles, Nokia's focus on AI and technology advancements, alongside robust infrastructure growth, positions it for long-term opportunities. The revised profit outlook highlights the impact of macroeconomic factors, yet the company remains optimistic about cash flow and strategic growth areas.

Data provided by:

The Fly

Nokia Earnings Call Summary

Earnings Call Date:Jan 29, 2026

(Q4-2025)

% Change Since: |

Next Earnings Date:Apr 23, 2026

Earnings Call Sentiment Positive

The call conveyed cautious optimism. Nokia reported modest revenue growth, strong order momentum in Optical and AI & Cloud, multiple design wins and a solid cash position, and it set clear multi-year targets and strategic reorganizations (Infinera acquisition, Mobile Infrastructure, Nokia Defense). At the same time, the company faces near-term margin pressure from growth investments and acquisition/integration costs, restructuring cash outflows, Q1 seasonality headwinds, a notable decline and impairment in Nokia Technologies, and regional/contract-related pressures (e.g., North America). Overall the positives — strategic positioning for AI & cloud, product ramps, design wins, and healthy cash conversion — outweigh the near-term transitional challenges and costs.

Q4-2025 Updates

Positive Updates

Quarterly and Full-Year Revenue Growth

Q4 net sales of EUR 6.1 billion, up 3% year-over-year; full-year 2025 net sales EUR 19.9 billion, with full-year operating profit of EUR 2.0 billion (slightly above midpoint of guidance).

Strong Free Cash Flow and Net Cash Position

Q4 free cash flow of EUR 226 million; free cash flow conversion for 2025 of 72% (within guided 50%–80% range); ended Q4 with net cash of EUR 3.4 billion (including a EUR 0.9 billion NVIDIA equity investment).

Network Infrastructure Momentum

Network Infrastructure net sales grew 7% in Q4. Optical Networks grew strongly (reported 17% in the quarter) and book-to-bill for the segment was above 1, supported by AI & cloud demand.

AI & Cloud Customer Traction

AI & Cloud customers accounted for 16% of Q4 net sales and 30% of Optical Networks; the company reported EUR 2.4 billion of orders from AI & cloud customers in 2025.

Optical Product Ramp and Design Wins

800G ZR and ZR+ pluggable products are shipping with initial field performance positive; multiple design wins and supply into scale deployments with focus on ramping production.

IP Networking and Automation Advances

Launched 7220 IXR-H6 data center switching platform and Agentic AI event-driven automation (claimed to reduce network downtime by 96%); secured design win for next‑generation data center switching platform.

Strategic Portfolio and Organizational Moves

Acquisition of Infinera completed to strengthen optical capabilities; created Mobile Infrastructure segment (Core Software, Radio Networks, Technology Standards) and new Nokia Defense incubation unit to target defense and NATO opportunities.

Nokia Shanghai Bell and Expected Synergies

Closed transaction to take full ownership of Nokia Shanghai Bell; expects approximately EUR 200 million run-rate cost synergies and integration costs of EUR 350–400 million over 24–36 months.

Clear 2026 Targets and Multi-year KPIs

2026 operating profit target EUR 2.0–2.5 billion; Network Infrastructure CAGR target 6%–8% (2025–2028) and 10%–12% for combined Optical & IP; Network Infrastructure operating margin target 13%–17% by 2028; Mobile Infrastructure operating profit target at least EUR 1.5 billion.

Order and Partner Momentum for Core Software and Standards

Core Software won a 5G core deal with Telia and expanded Network as Code platform collaboration (over 75 partners, including 43 telcos); Technology Standards maintains ~EUR 1.4 billion contracted net sales run rate.

Negative Updates

Operating Margin Pressure and Short-Term Profit Impact

Q4 operating margin 17.3%, 90 basis points below prior year, driven by increased investments in growth areas (including costs related to the Infinera acquisition) and new product ramp effects.

Segment Gross Margin Deterioration in Network Infrastructure

Network Infrastructure gross margin declined by 80 basis points to 44.6% in Q4, with operating margin impacted by lower gross margin plus increased R&D and acquisition-related costs.

Nokia Technologies Quarterly Decline and Impairment

Nokia Technologies net sales declined 17% in Q4, with an impairment charge of EUR 20 million recorded against a prior asset purchase.

Cloud & Network Services Near-Term Revenue Phasing

Cloud and Network Services declined 4% in Q4 due to revenue recognition phasing, though full-year growth was 6%; gross margin improvement in the quarter benefited partly from a EUR 37 million provision reversal (one-off).

Fixed Networks Deprioritization and Flat Performance

Overall Fixed Networks performance was flat in Q4 despite fiber OLT growth of 16% year-over-year, as Nokia is deprioritizing certain CPE products that dilute margins.

Restructuring and Integration Cash Costs

Reported EUR ~300 million of restructuring in 2025 and guidance of approximately EUR 450 million of cash outflow for restructuring in 2026; integration costs for NSB expected EUR 350–400 million over 24–36 months—pressures on reported vs comparable earnings.

Near-Term Seasonality / Q1 Headwind

Company expects Q1 2026 net sales to decline somewhat more than normal seasonality (historic ~24% sequential drop excluding Nokia Technologies) due to above-normal Q4 2025 activity, creating short-term revenue headwind.

Mobile Infrastructure Top-Line Headwinds and Regional Pressure

Mobile Infrastructure faces top-line headwinds from prior contract losses (notably in North America/AT&T-related impacts); some regional declines observed (India, Greater China) and CNS/Mobile Networks declines in North America in the quarter.

Supply Chain and Manufacturing Scaling Risk

Management acknowledges supply constraints in the broader AI/data-center ecosystem and the need to scale optical manufacturing (CapEx and fab ramp required); ramp timing could limit near-term revenue capture.

Guidance Range and Margin Uncertainty

2026 operating profit guidance spans EUR 2.0–2.5 billion (a EUR 500 million range); management cites new product launches and ongoing investments in AI & Cloud as potential downward pressure on gross margin and OpEx in the near term.

Company Guidance

Nokia guided 2026 operating profit of EUR 2.0–2.5 billion, saying Network Infrastructure growth in 2026 should be in line with its 2025–2028 targets (6–8% CAGR overall and 10–12% for Optical+IP) and that Network Infrastructure operating margin should expand toward 13–17% by 2028 (versus 9.5% in 2025); Mobile Infrastructure is targeted to deliver at least EUR 1.5 billion of operating profit in 2026 (consistent with 2025), Portfolio Businesses (2025: EUR 850 million net sales, EUR 97 million operating loss) are expected to show a lower operating loss in 2026, and Group Common costs are forecast at ~EUR 150 million (vs EUR 190 million in 2025). Additional modelling assumptions include comparable financial income/expense of +EUR 50–150 million, a comparable tax rate around 26–27% with ~EUR 500 million of cash tax outflows, CapEx of EUR 900–1,000 million (to expand optical manufacturing), free cash flow conversion of 65–75% (2025: 72%), end‑Q4 net cash of EUR 3.4 billion, NSB integration run‑rate cost synergies of ~EUR 200 million with integration costs of ~EUR 350–400 million over 24–36 months, an expectation that Q1 2026 net sales will fall somewhat more than the historical ~24% sequential seasonal decline, and FX assumptions around USD/EUR ~1.18 (c. EUR 50 million operating profit sensitivity per EUR 0.02 move, ~half hedged).

Nokia Financial Statement Overview

Summary

Strong revenue recovery (40.2% TTM) and a conservative balance sheet (debt-to-equity 0.21, equity ratio 54.33%) support the score. Offsetting this are pressured profitability (net margin down to 5.87%) and weaker cash generation signals (FCF growth -10.62% TTM; operating cash flow to net income 0.20).

Income Statement

Positive

Nokia's income statement shows a strong gross profit margin of 60.31% in the TTM, indicating efficient cost management. However, the net profit margin has decreased to 5.87% from 6.64% in the previous year, reflecting some pressure on profitability. Revenue growth is positive at 40.2% TTM, a significant improvement from the previous year's decline, suggesting a strong recovery and growth trajectory.

Balance Sheet

Positive

The balance sheet is stable with a debt-to-equity ratio of 0.21, indicating a conservative leverage position. Return on equity is modest at 5.75%, down from previous years, suggesting room for improvement in generating returns for shareholders. The equity ratio stands at 54.33%, reflecting a solid equity base relative to total assets.

Cash Flow

Positive

Cash flow analysis shows a decline in free cash flow growth by 10.62% TTM, indicating challenges in cash generation. The operating cash flow to net income ratio is 0.20, suggesting that operating cash flows are not fully covering net income, which could be a concern if it persists. However, the free cash flow to net income ratio remains healthy at 67.65%, showing decent cash conversion.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	20.15B	19.22B	21.14B	24.91B	22.20B	21.87B
Gross Profit	8.89B	8.86B	8.69B	10.22B	8.83B	8.21B
EBITDA	2.73B	3.43B	2.87B	3.55B	2.68B	1.93B
Net Income	1.20B	1.28B	665.00M	4.25B	1.62B	-2.52B
Balance Sheet
Total Assets	36.04B	39.15B	39.86B	42.94B	40.05B	46.52B
Cash, Cash Equivalents and Short-Term Investments	5.67B	8.91B	8.24B	9.16B	9.60B	9.86B
Total Debt	4.07B	4.75B	5.19B	5.52B	5.66B	7.94B
Total Liabilities	16.37B	18.40B	19.23B	21.52B	22.59B	31.17B
Stockholders Equity	19.58B	20.66B	20.54B	21.33B	17.36B	15.25B
Cash Flow
Free Cash Flow	1.37B	2.02B	665.00M	873.00M	2.06B	1.28B
Operating Cash Flow	2.02B	2.49B	1.32B	1.47B	2.63B	1.76B
Investing Cash Flow	-1.34B	-117.00M	1.04B	-1.88B	-1.79B	-1.52B
Financing Cash Flow	-2.74B	-2.00B	-1.50B	-837.00M	-1.21B	883.00M

Nokia Technical Analysis

Technical Analysis Sentiment

Negative

Last Price6.29

Price Trends

50DMA

6.40

Negative

100DMA

6.00

Positive

200DMA

5.40

Positive

Market Momentum

MACD

0.07

Positive

RSI

42.96

Neutral

STOCH

55.93

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NOK, the sentiment is Negative. The current price of 6.29 is below the 20-day moving average (MA) of 6.57, below the 50-day MA of 6.40, and above the 200-day MA of 5.40, indicating a neutral trend. The MACD of 0.07 indicates Positive momentum. The RSI at 42.96 is Neutral, neither overbought nor oversold. The STOCH value of 55.93 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NOK.

Nokia Risk Analysis

Nokia disclosed 34 risk factors in its most recent earnings report. Nokia reported the most risks in the "Finance & Corporate" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 1 New Risks

We may be unable to realize the anticipated benefits, synergies, cost savings or efficiencies from acquisitions, and we may encounter issues or inefficiencies related to our organizational and operational structure including being unable to successfully implement related business plans. Q4, 2024

Nokia Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CSCO	77 Outperform	$311.98B	29.77	23.01%	2.09%	8.91%	14.53%
ERIC	70 Outperform	$36.57B	12.51	28.83%	2.51%	1.04%	―
MSI	70 Neutral	$67.47B	32.51	115.80%	1.18%	6.17%	35.41%
HPE	68 Neutral	$28.97B	-288.85	0.23%	2.17%	14.17%	-102.25%
NOK	65 Neutral	$37.65B	38.38	4.03%	2.26%	5.05%	115.92%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
UI	60 Neutral	$33.56B	42.42	155.78%	0.49%	36.77%	102.83%

* Technology Sector Average

Performance Comparison

NOK

Nokia

6.29

1.70

37.01%

CSCO

Cisco Systems

78.43

19.40

32.85%

ERIC

Telefonaktiebolaget LM Ericsson

10.89

3.35

44.45%

MSI

Motorola Solutions

403.15

-64.35

-13.76%

Ubiquiti Networks

566.38

169.47

42.70%

HPE

Hewlett Packard Enterprise

22.01

1.38

6.69%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jan 30, 2026