What’s Next For Nokia Stock?
Nokia stock (NYSE: NOK) is up 11% in the past month, topping the S&P 500’s 2% gain. Ericsson stock (NASDAQ: ERIC) is also higher, signaling strength in telecom equipment. Nokia’s rally comes from two key wins: a multi-year AT&T deal on 5G automation and EU approval of its $2.3 billion Infinera acquisition. Both moves boost its U.S. presence and optical networking position as demand for AI-ready infrastructure grows.
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Financials: Growth with Margin Strain
In Q2 2025, Nokia posted revenue of €4.93 billion ($5.8 billion), up 1.8% year over year. Net profit was €96 million, a return to the black after a loss a year earlier. Comparable operating profit was about €300 million, though margins stayed under pressure. Growth in Network Infrastructure and Cloud & Network Services helped offset continued weakness in Mobile Networks, where 5G rollouts remain sluggish.
Guidance Cut Amid Cost Pressures
Earlier this year, Nokia named Justin Hotard, former Intel AI & Data Center executive, as CEO. The move signals a stronger push into AI infrastructure and data centers. Near-term headwinds are significant. Nokia cut its 2025 operating profit guidance to €1.6B–€2.1B, down from €1.9B–€2.4B, citing a weaker U.S. dollar and tariff-related costs. Investors will be watching how Hotard manages these challenges.
Valuation: Premium vs. Peers
At about $4.60 per share (Sep 11), Nokia trades around 15× consensus 2025 earnings—a premium versus Ericsson at ~13× forward earnings. While the stock has rallied, fundamentals remain mixed—modest revenue growth, margin pressure, and lowered guidance. At these levels, Nokia doesn’t look cheap, though its longer-term opportunity in AI-driven networks could support the case for patient investors. See our analysis on Nokia Valuation: Expensive or Cheap for more details on what’s driving our price estimate for the stock.
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Nokia’s stock has momentum, backed by strategic wins and investor optimism, but near-term financial pressures limit upside. That said, investing in a single stock carries inherent risks, and a diversified approach may offer more stability. You could explore the Trefis Reinforced Value (RV) Portfolio, which has outperformed its all-cap stocks benchmark (combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) to produce strong returns for investors. Why is that? The quarterly rebalanced mix of large-, mid- and small-cap RV Portfolio stocks provided a responsive way to make the most of upbeat market conditions while limiting losses when markets head south, as detailed in RV Portfolio performance metrics.
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