The quarter itself was solid. Nokia said on April 23 that comparable net sales rose 4% year over year on a constant-currency and portfolio basis, with comparable operating margin up to 6.2% from 4.2% a year earlier (Nokia Q1 2026 Interim Report, April 23, 2026). Free cash flow came in at EUR 0.6 billion, and net cash and interest-bearing financial investments reached EUR 3.8 billion (Nokia Q1 2026 Interim Report, April 23, 2026).

That follows a decent 2025. Nokia said in its January report that full-year comparable operating profit was EUR 2.0 billion and free cash flow was EUR 1.5 billion, equal to 72% conversion from comparable operating profit (Nokia Corporation Financial Report for Q4 2025 and full-year 2025, January 29, 2026). The company then said on April 23 that it is tracking somewhat above the midpoint of its 2026 comparable operating profit outlook of EUR 2.0 billion to EUR 2.5 billion, with the full-year view unchanged (Nokia Q1 2026 Interim Report, April 23, 2026).

That matters because it gives the stock a floor. Nokia is not trading like a broken business at the moment. But a floor is not a thesis. The buy case needs more than proof that the machine still runs.

The clearest change in the Nokia stock outlook 2026 is the scale of the Network Infrastructure upgrade. Nokia now expects that segment to grow 12% to 14% in 2026, up from the original 6% to 8% view, with Optical Networks and IP Networks together seen growing 18% to 20% (Nokia Q1 2026 Interim Report, April 23, 2026). That is not a small revision. It is management saying the demand backdrop has moved enough to change the plan.

The company’s AI and cloud customer business is doing the heavy lifting. Nokia said revenue from that group rose 49% in Q1 and now makes up 8% of group sales, after booking EUR 1 billion of orders from those customers in the quarter (Nokia Q1 2026 Interim Report, April 23, 2026). In its January earnings call summary, Yahoo Finance said Nokia had already collected EUR 2.4 billion in AI and cloud orders across 2025, with that customer group accounting for 16% of Network Infrastructure sales and 30% of Optical Networks revenue in Q4 (Yahoo Finance / Nokia Q4 Earnings Call, January 29, 2026).

There is also capacity being built to meet that demand. Nokia said its new indium phosphide manufacturing facility in San Jose is on track to begin ramping later this year, with more meaningful production expected in 2027 (Nokia Q1 2026 Interim Report, April 23, 2026). The company also said at the OFC conference in March that it announced four new DSPs powering 13 new solutions, with sampling due in mid-2027 and volume production in the second half of that year (Nokia Q1 2026 Interim Report, April 23, 2026).

That is the bull case in plain English: Nokia is pushing harder into the parts of networking where AI spending is showing up, and the order data says customers are paying attention. Nokia’s long-term targets, set at its Capital Markets Day in November 2025, call for 6% to 8% net sales CAGR from 2025 to 2028 and comparable operating profit of EUR 2.7 billion to EUR 3.2 billion by 2028 (Nokia Corporation Financial Report for Q4 2025 and full-year 2025, January 29, 2026). If the AI demand picture holds, those targets stop looking aspirational and start looking within reach.

That is the key word, though, within reach. The company’s own language is a useful guide, but it is still management’s version of events.

The trouble with Nokia is that the bullish parts do not cancel out the weak ones. They just make the company look more interesting than it has been. Mobile Infrastructure remains the awkward half of the story, and it is not getting prettier by itself.

Nokia said on April 23 that Mobile Infrastructure net sales rose 3% in Q1 on a constant-currency basis, but Radio Networks was flat, while Core Software grew 5% and Technology Standards grew 10% (Nokia Q1 2026 Interim Report, April 23, 2026). That is a useful reminder that the mobile unit is not collapsing, but it is also not a breakout engine.

Inderes, writing in February, was blunt about the issue. The firm said Nokia losing AT&T’s radio networks is a major setback in North America, which it described as important to profitability, and argued that without a turnaround in earnings or a restructuring of the business, it is hard to justify material upside from the low valuation over the next 12 months (Inderes, February 25, 2026). Light Reading added another layer of context last year, noting that Nokia had lost both Verizon and AT&T as mobile customers this decade and that its mobile operating margin stood at just 5.3% in 2024 (Light Reading, June 13, 2025).

The market backdrop does not help much either. Light Reading said Omdia data showed global radio access network product revenues fell roughly 12% in 2024 to about $35 billion, and that the market was expected to stay relatively flat near term (Light Reading, June 13, 2025). A flat market is not fatal, but it is not the kind of tide that rescues a vendor with customer losses and thin margins.

This is why the stock remains difficult to call. Nokia’s growth story is real, but it is not broad-based. One division is carrying the argument; the other is still asking for patience.

Nokia is not just trying to grow. It is spending to grow, and that always deserves a closer look. The company guided 2026 capital expenditures of EUR 900 million to EUR 1.0 billion, driven mainly by optical networking manufacturing expansion and real estate renewal projects (Nokia Corporation Financial Report for Q4 2025 and full-year 2025, January 29, 2026; Nokia Q4 Earnings Call Highlights, January 29, 2026). It also said free cash flow conversion for 2026 is expected to land between 55% and 75% (Nokia Q4 Earnings Call Highlights, January 29, 2026).

The Infinera acquisition adds another layer of complexity. Nokia said it expects roughly EUR 200 million in run-rate cost synergies, but integration costs are estimated at EUR 350 million to EUR 400 million over 24 to 36 months (Nokia Corporation Financial Report for Q4 2025 and full-year 2025, January 29, 2026; Nokia Q4 Earnings Call Highlights, January 29, 2026). That means the deal should not be judged on the collaboration headline alone. For a while, the math still hurts.

Even in Q4 2025, the spending showed up in the margins. Nokia said comparable operating margin slipped 90 basis points year over year to 17.3% because of growth investments in Network Infrastructure, including Infinera integration (Nokia Corporation Financial Report for Q4 2025 and full-year 2025, January 29, 2026). That is a manageable tradeoff if the growth lands. It is a mess if it does not.

The honest answer is that Nokia looks better than it did a year ago, but the stock case is still selective rather than clean. The bull argument rests on a credible shift toward AI-driven infrastructure demand, faster growth in Network Infrastructure, and improving cash generation. The bear argument rests on a mobile business that is still under pressure, a North American customer base that has already been damaged, and investment needs that will keep cash flow under strain for a while.

Nokia enters the rest of 2026 with decent momentum. It has EUR 3.8 billion in net cash and interest-bearing financial investments, a stronger margin profile than it had in Q1 2025, and a raised growth assumption for optical and IP networking (Nokia Q1 2026 Interim Report, April 23, 2026). But the stock does not need a better quarter. It needs evidence that the better quarter is the start of something durable.

Nokia plans to publish its second quarter and half-year 2026 results on 23 July 2026 (Nokia Q1 2026 Interim Report, April 23, 2026). That report should answer three questions that matter more than the headline EPS line: whether Network Infrastructure is still growing at an elevated pace, whether AI and cloud orders are turning into revenue, and whether Mobile Infrastructure is stabilizing or just treading water. Until then, NOK looks like a stock with a real thesis, but not one that has earned blind confidence.