Nokia Oyj NOK

Key data

The business

Nokia makes the physical equipment that carries phone calls and internet traffic, in three big pieces. Mobile Infrastructure, the radios and base stations bolted to cell towers and sold to carriers like T-Mobile and Deutsche Telekom, is the largest and most price-pressured, fighting Ericsson, Samsung, and a barred-from-the-West Huawei. Network Infrastructure, the optical and IP routing boxes that move data between and inside data centers, is the smaller, faster part, the one the Infinera acquisition bulked up. And Nokia Technologies, a patent library so deep that almost every smartphone maker writes Nokia a check to use it, a high-margin annuity that lands lumpy and often catches up in the fourth quarter. The real moat lives in that last box and in the engineering scale a 5G radio demands, a moat that has not stopped the top line from shrinking for four straight years. Nokia spends about a quarter of every euro of sales on research.

The numbers

Start with the bottom line the company points you to, and the one it would rather you skip. Every print of the last year cleared the bar, but the bar is low.

Q4 is the outlier every year: patent renewals and licensing catch-ups inflate it, which is why Q4 2025 nearly trebled the surrounding quarters. The base quarters run €0.06 to €0.08, and even after four straight small beats, consensus keeps the full year near half a euro. This is not a company surprising anyone with growth.

Sales bled from €22.2B to €19.9B over four years, a slow leak, not a collapse. The €4.3B profit in 2022 is a mirage, flattered by a one-time deferred tax credit of nearly €3B. Strip it and real earning power has sat between €0.7B and €1.3B, while reported operating income actually halved, from €2.16B in 2021 to €885M in 2025, as restructuring ate the middle. Here is the tension: the comparable operating profit Nokia guides to, €2.1B to €2.6B for 2026, is a different and rosier number than the €885M that hit the books. The market pays about 21x for the newer business to convert into group earnings, and the one print that settles it is reported operating profit closing the gap on comparable, not another year of charges called one-time.

The growth is real where it is smallest.

That last line, sales to AI and cloud customers up 105%, is the entire case for owning it in one row. But those customers are a slice of a group still weighted to mobile, which grew 7% off a 2024 trough.

Management

No insider bought or sold a share on the open market in the past twelve months, so there is no signal to read there. Justin Hotard, who ran Intel's data-center group, took over as CEO in 2026, and his hiring is itself a statement of where the board thinks the growth is. Capital return is modest and honest: a €0.04 quarterly dividend, and a €703M buyback finished in April 2025 with all 150 million repurchased shares canceled, a real reduction rather than a plug for stock comp. The quiet strength is the balance sheet, net cash, which lets Nokia fund both the restructuring and the Infinera bet without leaning on anyone. Pay detail is not disclosed in this run.

How it fails or surprises you

Mobile still shrinks the whole. Mobile Infrastructure is the biggest chunk and grew just 7% off a low base, in a market where Ericsson and Samsung chase the same North American carrier budgets. One more year of AT&T or T-Mobile trimming radio spend, as in 2023 and 2024, swamps the optical growth. Watch Mobile Infrastructure net sales and any named carrier cut.

The "comparable" gap never closes. Q2 reported operating margin was negative 1.0% against a comparable 9.0%, and reported EPS was €0.00. Nokia has booked restructuring as one-time for a decade. If it never truly stops, reported earnings near zero are the truth and 68x is the real multiple, not 21x. Watch reported operating profit converge toward comparable, or not.

AI data-center wiring compounds (right tail). Sales to AI and cloud customers rose 105% in Q2, Optical 20%, IP 16%. The market prices Nokia as ex-growth telecom, so it pays almost nothing for the chance that data-center interconnect becomes a multi-year driver and lifts Network Infrastructure margins. Watch that segment's sales and margin, quarter after quarter.

Closing thoughts

Network Infrastructure's growth either converts into real group earnings or it doesn't, and the gap between reported operating profit and comparable operating profit is what tells you. The distribution splits on that hinge: does visible Network Infrastructure growth translate into group-level reported earnings before mobile's decline and perpetual restructuring cancel it out. The fatter tail is probably the middle, a business earning €0.40 to €0.50 a year, changing hands near 20x, re-rating slowly if at all, because the left tail (mobile rolls over, restructuring never ends) and the right tail (AI wiring compounds into a growth multiple) roughly offset. Net cash makes the left tail survivable rather than fatal. What is at risk if mobile rolls over is a slide back toward reported break-even and a stock that looks expensive on any honest earnings figure. What the right tail is worth is a re-rating from telecom-in-decline to data-center-adjacent growth.

The bet is still that the optical and routing gear wiring AI data centers grows fast enough to outrun the shrinking cell-tower business, and that the patent checks keep clearing. It breaks when Mobile Infrastructure sales turn negative again while reported operating profit stays stuck below comparable. The one pair of numbers that tells you first is Network Infrastructure growth set against Mobile Infrastructure growth, quarter by quarter. When mobile is falling faster than the new gear is rising, the bet is lost, whatever the comparable slide claims.