Shares of Nokia Corporation (NOK -14.81%) plunged on Thursday, along with the rest of the AI-related tech sector, falling 15.4% as of 3:49 p.m. EDT.
Nokia delivered an earnings beat this morning; however, in this earnings season, tech company earnings "beats" don't mean much unless they're truly massive. Overly high expectations, along with fears over the sustainability of AI spending, appear to be weighing on Nokia's stock today.
NOK Nokia
NYSE · As of 4:00 PM ET 10/22/26
Nokia delivers hefty AI-related growth, the market shrugs
Like most AI stocks, Nokia had already rallied this year heading into this earnings report, though the stock was well off its June highs. Still, Nokia entered trading today with a P/E ratio in the high 70s, leaving little room for disappointment.
In the third quarter, the company grew revenue by 9.7% to 5.15 billion Euros, with adjusted earnings per share up 50% to $0.09 per share. That profit growth showed a nice 220-basis-point expansion in operating margins. Both figures were head of expectations.
10% revenue growth doesn't necessarily scream "AI growth," however, Nokia's segments displayed a remarkable range. Management noted that AI and cloud customers grew revenue by 123%, while Nokia's order intake surged 118% for that segment.
AI and cloud sales appear within the overall network segment, which grew revenue 15%. Mobile networks grew by a more pedestrian 5%, in line with the overall growth of that industry.
These were solid results, but perhaps not enough for a market that had previously bid Nokia up to the status of an "AI stock." Additionally, Nokia merely reiterated its full-year 2026 guidance without increasing it, which may have contributed to dashed expectations.
Image source: Getty Images.
A sector-wide sell-off
It appears Nokia's sell-off may have less to do with the reported results and more to do with widespread selling across AI stocks today. While most AI companies have been reporting strong results, it appears investors are growing nervous about the sustainability of these growth and profit figures going forward after a three-year "boom."
However, if the AI build-out extends, for say, another five years, current prices would be bargains. While the boom's length is uncertain, investors seeking more AI exposure may want to buy this dip.
