What’s Happening With Nokia Stock?

Nokia stock (NYSE: NOK) has risen by 11% over the last month, outperforming the S&P 500’s 2% increase. Ericsson stock (NASDAQ: ERIC) has also gained, indicating resilience in the telecom equipment sector. Nokia’s surge is driven by two significant victories: a multi-year 5G automation deal with AT&T and the EU’s approval of its $2.3 billion acquisition of Infinera. Both developments enhance its presence in the U.S. market and strengthen its optical networking capabilities as demand for AI-ready infrastructure escalates.

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Financials: Growth with Margin Strain

During Q2 2025, Nokia recorded revenue of €4.93 billion ($5.8 billion), marking a 1.8% year-over-year increase. Net profit was €96 million, marking a return to profitability after a loss the previous year. The comparable operating profit was approximately €300 million, although margins remained under pressure. Increases in Network Infrastructure and Cloud & Network Services mitigated ongoing weaknesses in Mobile Networks, where 5G deployments are still slow.

Guidance Cut Amid Cost Pressure

Earlier this year, Nokia appointed Justin Hotard, former Intel AI & Data Center executive, as CEO. This move indicates a stronger commitment to AI infrastructure and data centers. However, there are considerable near-term challenges. Nokia reduced its operating profit guidance for 2025 to €1.6B–€2.1B, down from €1.9B–€2.4B, due to a weaker U.S. dollar and costs related to tariffs. Investors will be keen to observe how Hotard navigates these issues.

Valuation: Premium vs. Peers

At approximately $4.60 per share (Sep 11), Nokia is trading at around 15× consensus 2025 earnings—which is a premium compared to Ericsson’s ~13× forward earnings. While the stock has experienced a rally, the underlying fundamentals remain mixed—showing modest revenue growth, margin pressure, and reduced guidance. At current levels, Nokia does not appear inexpensive, though its long-term prospects in AI-driven networking could support its case for investors willing to be patient. Refer to our analysis on Nokia Valuation: Expensive or Cheap for further details on the factors influencing our price estimate for the stock.

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