Nokia Stock Analysis: Is NOK a Buy Before Oct 22 Earnings? (2026 Deep Dive)

AI-generated source summary

Nokia's stock price has surged 110% to $10.60 over the past year, while its reported earnings have collapsed. This disconnect is attributed to massive write-downs and restructuring charges, which mask a positive comparable operating profit of €434 million. The company's AI and cloud infrastructure segment is experiencing significant growth, with a 105% year-over-year increase in revenue, reaching €446 million in Q2. This growth is driven by AI demand and network infrastructure upgrades, with Nokia investing heavily in expanding its manufacturing capacity in San Jose and Pennsylvania to meet the projected demand. Despite these growth factors, Nokia faces challenges with thin operating margins (7.93%) compared to competitors like Cisco (27.72%) and a high forward P/E ratio of 24.45x. Free cash flow was negative at -€732 million in Q2 due to restructuring and working capital outflows, although the company maintains substantial cash reserves ($5.13 billion) to cover its debt ($3.36 billion). Analysts maintain a buy rating with an average price target of $14.97, suggesting significant upside potential if supply constraints ease and AI revenue converts effectively.

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