Nokia Takes a Hit: What's Behind the 9.2% Drop?

Nokia stock got hammered today, sliding 9.2% while the broader market stayed flat (S&P 500 +0.3%, Nasdaq +0.5%). Here’s what spooked investors:

The Restructuring Play

The Finnish telecom giant unveiled a major overhaul—splitting operations into two separate units focused on network infrastructure and mobile infrastructure. On paper, it’s a strategic move to chase the AI wave. But the market’s reaction? Cold shoulder.

The Nvidia Connection

Context matters: Just weeks ago, Nvidia dropped $1 billion for a ~3% stake in Nokia, cementing a partnership to bake AI into mobile networks and data center operations. That should’ve been bullish. Instead, today’s restructuring announcement felt like it raised more questions than answers.

The Real Issue: Market Skepticism

Investors aren’t buying the AI infrastructure narrative right now. There’s growing concern about data center overbuild—the whole sector is starting to look frothy. While Nokia’s angle (using AI to optimize mobile networks, not just build more hardware) has merit and real-world applications, sentiment is shifting.

The Takeaway

Nokia’s pivot to AI isn’t wrong strategically. But execution concerns + sector fatigue = selling pressure. Watch how the next earnings call goes—that’s when we’ll know if this restructuring actually moves the needle.