Nokia Corp (NYSE: NOK) plans to cut most of its mainland China workforce and close operational sites in stages by year-end, marking a significant strategic retreat from a market where it has operated for more than 40 years. The South China Morning Post reported the move, citing sources familiar with the matter, as domestic competitors continue to gain market share.

The restructuring affects teams within Nokia’s mobile networks and network infrastructure businesses, with layoffs planned in batches. A Shanghai-based source confirmed the batch-wise reduction, though the total number of affected employees remains unclear. Nokia did not immediately respond to requests for comment regarding the reports.

Market Reaction

Nokia shares fell 3.66% to $10.38 on Tuesday, reflecting both the specific news of the China retreat and broader weakness in the technology sector. The Nasdaq Composite fell 1.5%, while the S&P 500 lost 0.54%. Technology stocks were the worst performers among the 11 S&P 500 sectors, declining 2.5%. Despite this sector-specific pressure, eight other sectors traded higher, with an advance-decline ratio of 2.7 indicating that selling remained concentrated in growth and technology names.

Technical Position

Despite the recent decline, Nokia shares are up 144.47% over the past 12 months. However, intermediate technical indicators suggest weakening momentum:

• The stock trades 10.1% below its 50-day simple moving average of $11.55.
• It sits 12.5% below its 100-day SMA of $11.86.
• The stock remains 10.5% above its 200-day SMA of $9.40.
• The relative strength index stands at 49.89, signaling neutral momentum.

Analysts note that the $10 level is a key support area. A sustained break below this threshold could shift focus back to the 200-day SMA.

Analyst Outlook

Nokia carries a Buy rating with an average price forecast of $18.00. Recent analyst actions include:

• Morgan Stanley: Initiated with Overweight rating; forecast $8.00 (February 9).
• JP Morgan: Maintained Overweight rating; raised forecast to $21.00 (June 12).
• Argus Research: Upgraded to Buy rating; forecast $15.00 (April 27).

Nokia Corp (NYSE: NOK) shares extended their rally on Thursday, rising 2.81% to $10.63, as investors continued to re-evaluate the company’s valuation based on its expanding role in artificial intelligence infrastructure. The surge followed the release of second-quarter results that exceeded consensus estimates, with management raising the full-year profit outlook. This shift in sentiment highlights Nokia’s transition beyond its traditional telecommunications identity to become a key beneficiary of the AI boom.

The company reported net sales of 4.82 billion euros ($5.60 billion) for the quarter, representing an 8% year-over-year growth. Adjusted earnings per share came in at eight cents, surpassing the expected seven cents. Network Infrastructure revenue grew by 12%, fueled by significant gains in Optical Networks (+19%) and IP Networks (+15%). These operational improvements underpin the raised guidance provided by CEO Justin Hotard.

Financial Performance Highlights

A critical driver of this performance was the explosive growth in AI and Cloud revenue, which doubled (+103%) to account for 9.3% of total sales. This segment was supported by 2.8 billion euros in new AI and cloud orders. Hotard highlighted this expansion as evidence of Nokia’s increasing reach into high-growth infrastructure markets, distinct from its legacy telecom business.

Supply Chain and Strategic Outlook

Addressing potential headwinds, Hotard outlined a strategy to mitigate memory shortages expected through 2027. The plan involves securing long-term supply deals, adjusting product designs, and passing higher costs to buyers. These measures aim to protect margins amid constrained component availability.

What the Numbers Show

The divergence between the overall revenue growth (8%) and the AI/Cloud segment growth (+103%) indicates a structural shift in Nokia’s revenue mix. While traditional telecom networks remain stable, the rapid adoption of AI infrastructure is becoming a material contributor to the top line, justifying the market’s re-rating of the stock despite broader market volatility (Nasdaq +1.23%, S&P 500 +0.60%).

Technical Levels

Despite the recent surge, Nokia remains below key intermediate-term moving averages. At $10.63, the stock traded about 11.5% above its 20-day simple moving average and 14.6% above its 200-day SMA. However, it remained about 9.8% below its 50-day SMA and 9.1% below its 100-day SMA.

The relative strength index stood at 52.18, a neutral reading suggesting the stock is not overbought despite the sharp gain. Nokia’s RSI reached overbought territory in May before falling to oversold levels in July. A golden cross formed in October 2025 when the 50-day SMA moved above the 200-day SMA, but the 20-day SMA remains below the 50-day SMA, leaving the shorter-term trend mixed. Key support sits near $10, a round-number level where buyers have previously stepped in.