Nokia Sells Off Into Earnings as Ericsson's AI-Cost Warning Reads Across

A Steepening Slide, No Single Headline

NOK is down 7.33% over 24 hours to $10.67, and the more useful number is the trajectory: this extends a roughly 26% slide from the June 22 high near $14.43. The stock had run more than 100% into that peak, so part of this is simply air coming out of a crowded AI-networking trade.

There is no single-day bombshell to point at. On July 15 the ADR fell 3.9% to $11.25, one of a string of red days where Nokia underperformed even when the broader European ADR tape traded green. That relative weakness is the tell — this is Nokia-specific de-risking, not a macro tantrum.

The Real Overhang: A 72% Second-Half Profit Hurdle

The thing hanging over the stock is the math into Q2 earnings on July 23. Consensus wants roughly €4.83 billion of revenue and €0.051 in EPS, but the harder number is profit phasing: Nokia needs to book about €1.71 billion of operating profit in the second half — 72.4% of the €2.36 billion full-year consensus — after Q1 delivered just €281 million.

That is a steep back-half ramp, and it is why positioning is getting lighter ahead of the print. The single line item traders are fixated on is gross margin, penciled near 44.5% for Q2; if that slips, the H2 profit bridge stops adding up and the full-year target comes into question.

Ericsson Just Showed Where the Margin Pressure Lives

The specific reason margins are in doubt came from a competitor. On July 5, Ericsson flagged that the AI build-out is inflating component costs, with CFO Lars Sandström saying "the whole AI build-out is putting quite the pressure on the whole industry, including us" and pointing to higher memory and custom-chip prices squeezing Networks profitability into Q3.

Nokia builds in the same categories, so that read-across is direct — the stock dropped 2.5% to €10.30 on July 14 reacting to the Ericsson warning. The uncomfortable part of the setup is that AI demand is both the bull case and the cost problem: the same buildout driving Nokia's order book is bidding up the chips it needs to fill those orders.

What July 23 Actually Resolves

On paper the growth story is intact. Q1 2026 showed AI and cloud revenue up 49% year-over-year, more than €1 billion of new orders in a single quarter, and a book-to-bill near 3x, gross margin of 45.5%, and raised Network Infrastructure guidance to 12–14% growth. The $1 billion NVIDIA stake and AI-RAN partnership still anchor the multi-year thesis.

What changed is what the market will pay for. It has stopped rewarding announcements and started demanding realized margin and profit, and July 23 is the binary that settles it — either the H2 ramp is credible and margins hold against chip inflation, or the correction has more room. For the HIP-3 perp specifically, that earnings gap is the risk that matters: the contract runs continuously on the deployer's oracle while the underlying stock is closed, so a move on the 23rd can gap the mark with no live cash market to arbitrage against.