Nokia Shares Slide After Capital Markets Day Lacks New Deal Announcements

Nokia (HEL:NOK) took a hit Wednesday, with shares dropping over 5% in Helsinki and dipping more than 6% in U.S. premarket trading after its Capital Markets Day (CMD) wrapped up without fresh deal announcements. The market seemed hungry for new tie-ups, but all Nokia served was a thorough company shake-up.

The Finnish telecom giant revealed plans to streamline operations into two key divisions starting 2026: one zeroing in on AI and demand from data centers under network infrastructure, and the other focusing on traditional telecom gear in mobile infrastructure. While strategic on paper, analysts pointed out the absence of new external partnerships, especially following recent big moves involving Infinera (NASDAQ: INFN) and Nvidia (NASDAQ: NVDA).

Nokia aims to boost its operating profit to between €2.7 billion and €3.2 billion by 2028, which would mark a jump of up to 60% compared to last year's €2 billion. Industry watchers view this target cautiously, noting that sell-side consensus clusters at the bottom of this range. The company is also targeting a leaner cost base by trimming operating expenses from €350 million to €150 million within the same timeframe.

On the growth front, Nokia expects its network infrastructure arm to see 6%-8% compound annual sales growth through 2028, with optical and IP networks leading the charge at a projected 10%-12% growth rate. The mobile infrastructure segment is pinned to push gross margins close to 50% and increase operating profit from €1.5 billion.

A noteworthy addition came in the form of a new defence incubation unit designed to deliver secure connectivity specifically aimed at Western allies. While a strategic pivot, this move failed to quench investors' thirst for headline-grabbing alliances or contract wins announced during the event.

Market reaction appeared influenced by expectations of bolder news, reflected in the stock's immediate decline. Morgan Stanley analyst Terence Tsui described the CMD's focus as predominantly internal, suggesting the absence of new external announcements might prompt some share trimming by market participants.

From next year's Q1 earnings onward, Nokia will report under its new divisional setup, which might offer clearer insight into how these structural shifts play out financially. But for now, traders have little to chew on beyond the company's internal reshuffling and aggressive profit targets.

Is Nokia banking on internal efficiency and AI-driven growth to offset the lack of fresh partnerships? Only time will tell if this turnaround strategy brings the expected payoff.