Nokia Shares Fall 2.73% After Nvidia-Backed Rally Fizzles; Trading Volume Slumps to 202nd Largest

Market Snapshot

Nokia’s (NOK) stock closed on October 30, 2025, with a 2.73% decline, marking a reversal from its recent volatility. The company’s trading volume dropped 53.39% compared to the previous day, settling at $0.64 billion, a rank of 202 in the market. This decline followed a sharp two-day rally driven by a strategic $1 billion investment from Nvidia and a Q3 earnings beat. While the stock had surged to a decade-high of $8.19 on October 28, it retreated to $7.36 by October 30, reflecting profit-taking and market caution. The intraday high-to-close pullback underscores the mixed sentiment around the partnership’s long-term execution risks and revenue timelines.

Key Drivers

Strategic Partnership with Nvidia Validates AI-Driven Transformation

Nokia’s stock surged on October 28 after announcing a $1 billion strategic investment from Nvidia, granting the chipmaker a 2.9% stake via 166 million new shares issued at $6.01 apiece. The partnership centers on integrating Nokia’s optical, IP, and data-center networking with Nvidia’s accelerated computing platforms to develop AI-powered telecom infrastructure and 6G-ready “AI-RAN” solutions. For investors, this alliance repositions Nokia from a 5G cycle-dependent player to a high-growth AI infrastructure supplier, aligning with the broader AI supercycle. Nvidia’s involvement also signals validation of Nokia’s pivot toward next-generation networks, with both companies committing to shared roadmaps for AI-RAN and data-center technologies.

Q3 Earnings Beat and Guidance Upgrade Bolster Optimism

The partnership announcement was preceded by Nokia’s Q3 2025 earnings report, which exceeded expectations. The company reported net sales of €4.8 billion, up 12% year-over-year, driven by strong demand in optical networks and cloud/data-center segments. Comparable operating profit of €435 million outperformed forecasts, prompting management to raise full-year operating profit guidance. This performance, coupled with the Nvidia deal, reinforced the narrative of a company transitioning from cyclical telecom equipment provider to a key player in AI-driven infrastructure. Analysts highlighted the potential for margin expansion as Nokia’s AI-focused segments gain traction, though concerns remain about near-term pricing pressures in carrier markets.

Market Volatility and Execution Risks Emerge as Key Concerns

Despite the initial euphoria, the stock’s sharp post-announcement pullback revealed underlying skepticism. Trading volume spiked to 122.7 million shares on October 28, far exceeding the 3-month average, but decelerated on sideways days, indicating profit-taking. Analysts at Kepler Cheuvreux and others warned that the stock’s rally had been “excessive,” with valuations already pricing in uncertain partnership upside. The partnership’s revenue generation is not expected until 2027, starting with 5G deployments before transitioning to 6G. This timeline raises questions about the immediacy of financial benefits and the risk of delayed execution.

Mixed Analyst Sentiment and Strategic Positioning

The partnership has generated both bullish and cautious perspectives. Bulls argue that Nokia’s access to Nvidia’s ecosystem and its focus on AI-RAN and 6G could unlock long-term growth, particularly as global data-center spending accelerates. The collaboration with T-Mobile US on AI radio trials further underscores near-term commercial potential. However, bears highlight the challenges of scaling AI-RAN adoption, potential margin compression from competitive pricing, and macroeconomic headwinds such as capex pauses or renewed tariff shocks. The stock’s current valuation, with a forward P/E of 13.19, reflects optimism but hinges on Nokia’s ability to convert strategic partnerships into booked orders and margin expansion.

Strategic Implications for the AI Infrastructure Landscape

Nokia’s partnership with Nvidia positions it at the intersection of AI and telecommunications, a space projected to grow as data demands surge. The integration of Nvidia’s GPU-accelerated inference/training stacks into Nokia’s RAN, optical, and IP domains could enhance automation and energy efficiency, appealing to hyperscalers and large carriers. However, the success of this strategy depends on Nokia’s execution in embedding AI into its products and securing design wins. The company’s recent contracts, including a £2 billion UK 5G upgrade project and a green 5G deal in Japan, signal its ability to capture market share beyond traditional telecom players. Nonetheless, competition from rivals like Ericsson and geopolitical constraints in key markets such as China remain hurdles.

Conclusion

Nokia’s stock rally and subsequent pullback reflect a market grappling with the company’s strategic transformation. The Nvidia partnership and Q3 earnings beat have repositioned Nokia as a key player in AI-driven infrastructure, but the stock’s future performance will depend on the execution of its AI-RAN roadmap, margin dynamics, and broader macroeconomic conditions. Analysts remain divided between viewing the stock as a long-term growth opportunity and a speculative bet with execution risks. For now, the market appears to be pricing in a narrative of transition rather than immediate profitability, leaving the door open for both continued momentum and potential volatility.