Nokia (NOK) AI Stock Analysis

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Nokia

(NYSE:NOK)

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Neutral 59 (OpenAI - 5.2)

Rating:59Neutral

Price Target:

$8.00

▲(3.63% Upside)

Action:ReiteratedDate:01/31/26

NOK scores as a balanced setup: resilient balance sheet and positive cash generation support the story, and the latest earnings call adds confidence via multi-year targets and solid order momentum. The score is held back primarily by declining revenue and compressed profitability in 2025, alongside a demanding valuation (high P/E). Technicals are broadly neutral, offering limited near-term confirmation.

Positive Factors

Balance sheet strength

Nokia’s net cash position (end‑Q4 EUR 3.4B) and historically low leverage (debt/equity ~0.23–0.26) give durable financial flexibility. That balance‑sheet strength supports R&D, manufacturing scale‑up, M&A integration and cushions cyclical telecom capex cycles over the medium term.

Strong cash generation

Consistent positive operating cash flow and high FCF conversion (~72% in 2025) indicate Nokia reliably converts earnings into cash. This sustained cash generation funds capex for optical manufacturing, funds integration costs, and reduces dependence on external financing across the multi‑year strategic plan.

Optical & AI-cloud strategic positioning

Nokia has structurally strengthened its optical and cloud networking position via the Infinera acquisition, 800G product ramps, and strong AI & Cloud orders (EUR 2.4B in 2025). These moves create durable competitive advantages in high‑growth data center and cloud transport markets and support targeted Optical+IP CAGR.

Negative Factors

Multi‑year revenue decline

A multi‑year top‑line decline (2023–2025) weakens operating leverage and challenges scale economics. Persistent revenue contraction reduces margin recovery scope, pressures returns on invested capital, and implies sustained competitive or demand headwinds that could take multiple quarters to reverse.

Profitability compression

Despite solid gross margins, operating and net profitability have compressed materially due to increased investments, acquisition/integration and restructuring costs. Lower margins and reduced ROE constrain capital returns and indicate earnings sensitivity to execution and sales recovery over the next 2–3 years.

Integration & scaling execution risk

Large one‑time integration and elevated capex to scale optical manufacturing create execution risk: delays or cost overruns could push out revenue capture and compress margins. Successful ramp and synergy realization are required to justify acquisition benefits and meet multi‑year growth/margin targets.

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

Market Cap

$42.77B

Dividend Yield2.26%

Average Volume (3M)36.99M

Price to Earnings (P/E)58.9

Beta (1Y)0.39

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. Volume39,004,399

30 Day Avg. Volume36,992,981

Financial Highlights & Ratios

PEG Ratio-0.95

Price to Book (P/B)1.42

Price to Sales (P/S)1.56

P/FCF Ratio21.19

Enterprise Value/Market Cap0.84

Enterprise Value/Revenue1.88

Enterprise Value/Gross Profit4.47

Enterprise Value/Ebitda18.56

Forecast

1Y Price Target

$7.30

Price Target Upside-5.44% Downside

Rating ConsensusModerate Buy

Number of Analyst Covering6

EPS Forecast (FY)0.37

Revenue Forecast (FY)$24.26B

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

Revenue by Segment

Revenue by Segment
Highlights revenue contributions from different business units, indicating which segments drive growth and profitability, and where strategic shifts may be needed.

Chart InsightsNokia's Network Infrastructure and Mobile Networks segments have faced recent revenue declines, but the latest earnings call highlights a promising turnaround. The company reported a 9% increase in net sales, driven by growth in AI and cloud services, and expects further sequential growth in Q4. The Infinera acquisition and strategic partnerships are bolstering sales, particularly in optical and IP networks. However, challenges persist with declining margins, emphasizing the need for cost control and operational efficiency improvements to sustain growth momentum.

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

Overall fundamentals are mixed. Income statement strength is constrained by declining revenue (2023–2025) and profitability compression in 2025 versus 2024, while the balance sheet is resilient with manageable leverage (debt-to-equity ~0.23–0.26) and cash flow remains positive with decent conversion (2025 FCF conversion ~72%), despite lower free cash flow versus 2024.

Income Statement

Neutral

Revenue has trended down over the last three annual periods (2023–2025), including a ~5.2% decline in 2025, signaling a weak top-line trajectory. Profitability is mixed: gross margin remains solid (~42% in 2025), but operating and net profitability compressed sharply versus 2024 (net margin ~3.2% in 2025 vs ~6.6% in 2024). Earnings have been volatile over the cycle (large loss in 2020, unusually strong net margin in 2022, then normalization), which lowers confidence in consistency despite still-positive EBIT and net income in 2025.

Balance Sheet

Positive

Leverage looks manageable, with debt-to-equity consistently around ~0.23–0.26 in 2023–2025 (improved substantially from 2020’s higher leverage). Equity is sizable relative to the asset base, providing balance-sheet resilience. The key weakness is subdued shareholder returns recently: return on equity is low in 2025 (~2.9%) and down versus 2024 (~6.2%), indicating the company is not converting its capital base into profits as effectively as in stronger years (notably 2022).

Cash Flow

Positive

Cash generation is a relative positive: operating cash flow and free cash flow are positive across all shown years, and 2025 free cash flow grew modestly (~2.4%). Cash conversion remains decent, with free cash flow at ~71% of net income in 2025 (and ~81% in 2024). Offsetting this, free cash flow stepped down from 2024 to 2025 (about 2.02B to 1.41B), and the provided cash-flow-to-sales-type coverage measure is consistently low (~0.20 range), suggesting cash generation is not especially strong relative to the business scale.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	19.10B	19.22B	21.14B	24.91B	22.20B
Gross Profit	8.04B	8.86B	8.69B	10.22B	8.83B
EBITDA	1.94B	3.43B	2.87B	3.55B	2.68B
Net Income	604.18M	1.28B	665.00M	4.25B	1.62B
Balance Sheet
Total Assets	37.58B	39.15B	39.86B	42.94B	40.05B
Cash, Cash Equivalents and Short-Term Investments	6.42B	8.91B	8.24B	9.16B	9.60B
Total Debt	5.21B	4.75B	5.19B	5.52B	5.66B
Total Liabilities	16.53B	18.40B	19.23B	21.52B	22.59B
Stockholders Equity	20.96B	20.66B	20.54B	21.33B	17.36B
Cash Flow
Free Cash Flow	1.41B	2.02B	665.00M	873.00M	2.06B
Operating Cash Flow	1.99B	2.49B	1.32B	1.47B	2.63B
Investing Cash Flow	-1.34B	-117.00M	1.04B	-1.88B	-1.79B
Financing Cash Flow	-1.55B	-2.00B	-1.50B	-837.00M	-1.21B

Nokia Technical Analysis

Technical Analysis Sentiment

Positive

Last Price7.72

Price Trends

50DMA

6.79

Positive

100DMA

6.49

Positive

200DMA

5.60

Positive

Market Momentum

MACD

0.27

Negative

RSI

64.54

Neutral

STOCH

77.81

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NOK, the sentiment is Positive. The current price of 7.72 is above the 20-day moving average (MA) of 7.20, above the 50-day MA of 6.79, and above the 200-day MA of 5.60, indicating a bullish trend. The MACD of 0.27 indicates Negative momentum. The RSI at 64.54 is Neutral, neither overbought nor oversold. The STOCH value of 77.81 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
MSI	75 Outperform	$79.89B	37.84	104.74%	1.18%	6.17%	35.41%
CSCO	74 Outperform	$313.86B	27.95	24.34%	2.09%	8.91%	14.53%
UI	74 Outperform	$46.42B	52.27	136.08%	0.49%	36.77%	102.83%
ERIC	70 Outperform	$38.61B	13.37	―	2.51%	1.04%	―
HPE	67 Neutral	$28.53B	-281.76	0.23%	2.17%	14.17%	-102.25%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
NOK	59 Neutral	$42.77B	58.89	3.20%	2.26%	5.05%	115.92%

* Technology Sector Average

Performance Comparison

NOK

Nokia

7.72

2.82

57.62%

CSCO

Cisco Systems

79.46

17.49

28.22%

ERIC

Telefonaktiebolaget LM Ericsson

11.60

3.49

43.12%

MSI

Motorola Solutions

482.26

59.53

14.08%

Ubiquiti Networks

766.99

440.09

134.63%

HPE

Hewlett Packard Enterprise

21.47

2.94

15.87%

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 31, 2026