Nokia’s Military 5G Partnership Delivers Brief Rally Before Profit-Taking Ensues

Nokia shares staged a dramatic two-day swing this week, surging 8.7 percent on Thursday after the Finnish telecom equipment maker announced a defense-focused AI partnership, only to give back most of those gains in Friday’s session as investors locked in profits. The stock closed at €10.96, leaving it roughly flat on the week but still up an eye-popping 96.75 percent since the start of 2025.

The catalyst for Thursday’s spike was a collaboration between Nokia Defense and NestAI, a Finnish artificial intelligence company in which Nokia and state-backed investor Tesi jointly invested €100 million last November. The two firms unveiled a suite of technologies designed to bring 5G connectivity, AI-powered mission planning and advanced sensor fusion to military operations — addressing what they described as Europe’s need for sovereign defense capabilities against electronic warfare, jamming and drone threats.

Three technical pillars underpin the partnership. Nokia’s portable 5G networks will integrate with NestOS, NestAI’s adaptive operating system for combat environments. Nokia’s radio planning models will feed into NestOS’s mission-planning tools, allowing armed forces to assess connectivity in complex scenarios. A third component merges Nokia’s sensing and communications technology with NestAI’s multi-sensor tracking for earlier threat detection in difficult terrain. Mikko Hautala, Nokia’s chief geopolitical and government relations officer and chairman of Nokia Defense, said the offering provides the kind of sovereign technology NATO needs for future operations. NestAI founder Peter Sarlin stressed that the solution targets real conditions facing European forces, “developed and controlled from within Europe.”

The announcement sent Nokia’s Helsinki-listed shares sharply higher, dragging the OMXH25 index up 1.84 percent on Thursday. But the rally fizzled almost as quickly as it ignited. On Friday, the stock slid 3.40 percent in a session that saw rival Ericsson’s New York-listed ADRs fall 3.2 percent and Nokia’s own US-listed shares drop 4.9 percent — even as the broader S&P 500 edged up 0.17 percent. Analysts characterized the retreat as straightforward profit-taking rather than a reassessment of the company’s outlook.

Adding a layer of noise, a regulatory filing revealed that FMR LLC, the parent of Fidelity, reduced its indirect stake in Nokia below the 5 percent reporting threshold. Between June 29 and July 8, the fund manager trimmed its holdings from 298.78 million to 279.84 million shares — a disposal worth roughly €211 million at current prices. While such filings often draw attention, market participants noted they simply confirm a threshold crossing rather than indicating sustained selling pressure.

Should investors sell immediately? Or is it worth buying Nokia?

The technical picture has become more nuanced after the week’s volatility. Nokia’s shares now trade 9.42 percent below their 50-day moving average of €12.09, and the 20-day average has slipped beneath the 50-day — a classic short-term bearish signal. The 14-day relative strength index sits at 44.8, suggesting neutral territory with a slight bearish tilt but no oversold conditions that would typically attract bargain hunters. The MACD indicator is also below its signal line with a negative histogram.

Longer-term measures, however, tell a different story. The stock remains roughly 11 percent above its 100-day average and a substantial 44.57 percent above the 200-day moving average of €7.58. The 50-day average still holds above the 200-day, confirming that the overarching uptrend is intact. The annualized 30-day volatility stands at a striking 72.36 percent, underscoring the violent swings that have characterized Nokia’s recent trading.

The scale of the run-up over the past year is remarkable. From a 52-week low of €3.45 in August 2025, the stock surged to an all-time high of €14.97 on June 3 — a gain of more than 330 percent from trough to peak. Since that high, it has given back 26.82 percent, but the 12-month gain still stands at 152.42 percent. The dramatic re-rating has been fueled by accelerating demand for optical networking gear tied to artificial intelligence and cloud infrastructure. In the first quarter, sales to AI and cloud customers jumped 49 percent, reaching 8 percent of total revenue; the optical networks business alone grew 20 percent, with €1 billion in orders. Management expects combined IP and Optical Networks revenue to expand 18 to 20 percent for the full year.

Investors now shift their focus to July 23, when Nokia reports second-quarter results. Analysts project earnings per share of 7 US cents, up from 4 cents a year earlier, on revenue of $5.59 billion versus $5.15 billion in the prior-year period. Until then, the defense partnership with NestAI is likely to remain a talking point — a clear signal of Nokia’s push beyond its traditional telecom equipment base — even as the stock’s short-term technical signals and elevated volatility counsel caution.