Shares of Nokia tumbled 4.1% to $7.94 on March 27, erasing a week of gains as investors confronted a hard truth: one of America's largest wireless carriers is actively ripping out Nokia's radio equipment — and the AI-fueled rally that lifted the stock from $6 to above $8 may have gotten ahead of itself.
AT&T Has Already Torn Out Half of Nokia's Radios — And Isn't Stopping
AT&T's COO said the carrier is "about halfway through the rip-and-replace of some radios," with roughly 18 months of work remaining.
The project stems from a landmark five-year, $14 billion deal with rival Ericsson , which is systematically replacing Nokia gear across roughly a third of AT&T's nationwide wireless network.
AT&T booked $850 million in costs directly tied to removing Nokia equipment, part of a $1.2 billion writedown. For Nokia, this is lost recurring revenue in the world's most profitable telecom market — a wound that won't heal quickly.
The AI Rally Got Ahead of the Revenue
Nokia's stock surged 4.86% on March 16 alone on a wave of AI-networking partnership announcements.
Nvidia invested $1 billion at $6.01 per share to co-develop AI-powered radio access network technology. But the tactical setup hinges entirely on execution — these are partnerships, not signed contracts with immediate revenue. Today's sell-off reflects investors cashing in gains before the promises turn into actual sales.
2026 Guidance Already Disappointed Wall Street
Nokia's 2026 operating profit target of €2.0–€2.5 billion fell roughly 5% below analyst consensus of €2.37 billion, according to J.P. Morgan.
Management also warned that Q1 2026 net sales would decline "somewhat more than normal seasonality."
Nokia flagged tariffs, currency swings, and broader macro uncertainty in its outlook — all headwinds that make the gap between AI hype and reported earnings feel wider.
The Bigger Picture: Execution Must Catch the Narrative
Nokia's strategic pivot is real — targeting 6–8% annual revenue growth in Network Infrastructure and 10–12% in its optical and IP networking businesses through 2028. But with Q1 results due April 23, investors now need proof that AI partnerships and optical networking wins can offset the AT&T-sized hole in its traditional radio business. At $7.94, the stock trades roughly 32% above Nvidia's entry price — a premium that demands results, not just roadmaps.