Nokia Stock Crashes 8%: The Real Reason Behind the Shocking Drop
Nokia shares plummeted 8% on Thursday despite posting strong quarterly earnings that beat analyst expectations. The Finnish telecom giant delivered fourth-quarter revenue of $7.13 billion, surpassing the $6.95 billion forecast, while earnings per share hit $0.21 versus the predicted $0.17.
The dramatic sell-off had nothing to do with Nokia performance. Instead, investors caught the company in the crossfire of a massive artificial intelligence stock rout triggered by Microsoft disappointing AI revenue returns.
Microsoft Sparked the AI Stock Meltdown
Microsoft reported solid fiscal Q2 results but revealed something troubling. The software titan has poured billions into artificial intelligence development without seeing the expected returns. Wall Street panicked.
Investors immediately questioned every company spending heavily on AI. Nokia became collateral damage. The company had partnered with Nvidia in October to develop AI-powered platforms for 6G connectivity. This technology will boost mobile network capacity for data-intensive AI applications.
Nokia shares had soared after announcing that Nvidia partnership. The stock held those gains until Thursday. When AI stocks as a group came under fire, Nokia could not escape the bloodbath.
Trade Tensions Add to Investor Worries
Nokia CEO Justin Hotard dropped another concerning comment during a post-earnings interview with Reuters. He emphasized how European and American technology companies depend on each other. Given current trade tensions, markets interpreted this as a warning that Nokia growth could face headwinds.
The company had actually delivered encouraging 2026 guidance. Management expects revenue growth between 6% and 8% for the year ahead. Under normal circumstances, this forecast would have sent shares higher.
The Long-Term Opportunity Investors Are Missing
Thursday dramatic price action created a buying opportunity. Most artificial intelligence stocks had become overvalued. The market simply needed a catalyst to correct these valuations. Microsoft provided that trigger.
Nokia traditional business remains rock-solid. The company sells mobile networking platforms and fiber-optic equipment. This core revenue stream continues generating steady cash flow. The 6G AI partnership with Nvidia represents upside potential on top of that stable base.
Artificial intelligence will not disappear. Companies will continue investing in this technology because it delivers real productivity gains. Network infrastructure providers like Nokia will benefit as AI adoption accelerates. The selloff gives investors a chance to buy quality companies at better prices. More details on Nokia long-term prospects are available at The Motley Fool.
Frequently Asked Questions About Nokia Stock Drop
Why did Nokia stock crash despite good earnings?
Nokia stock fell 8% because of broader market fears about AI spending returns, not company performance. Microsoft revealed massive AI investments without matching revenue gains, triggering a selloff across all AI-related stocks. Nokia partnership with Nvidia for 6G AI technology made it a target despite beating earnings expectations.
What were Nokia actual fourth-quarter results?
Nokia delivered strong Q4 results that topped analyst forecasts. Revenue reached $7.13 billion, beating the $6.95 billion estimate by 3%. Earnings per share came in at $0.21, crushing the $0.17 consensus. The company also guided for 6% to 8% revenue growth in 2026.
Should investors buy Nokia after the stock drop?
The selloff created a potential buying opportunity for long-term investors. Nokia core telecom equipment business generates stable revenue while the Nvidia partnership adds AI growth potential. The stock had become overvalued before Thursday correction brought prices to more reasonable levels.
How will trade tensions affect Nokia business?
CEO Justin Hotard highlighted how US and European tech companies depend on each other during a Reuters interview. Trade tensions between these regions could impact Nokia supply chains and market access. However, the company diversified global operations may help mitigate these risks over time.
