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Is Nokia Oyj (HLSE:NOKIA) Undervalued As AI And Defense Deals Build?

Simply Wall St · 2d ago

Nokia Oyj (HLSE:NOKIA) has just logged a busy September, with a new Deepfield Cloud Intelligence rollout at Zain KSA, an extended AI-focused alliance with Microsoft, and a fresh defense-focused MoU with C3IA.

Recent trading has been choppy for Nokia Oyj, with the share price up 3.76% over the last day and 1.13% over 30 days, but down 19.53% across three months. At the same time, the year-to-date share price return of 65.86% and 1-year total shareholder return of 129.28% point to strong momentum building over a longer stretch.

Compare Nokia Oyj’s AI and network automation momentum with a curated group of peers by reviewing the 88 AI infrastructure stocks that is now shaping the backbone of global connectivity.

Bulls highlight Nokia Oyj’s AI initiatives and defense partnerships, while bears emphasize the recent three-month slide. As valuation moves into focus, the key question is whether the current numbers support a more optimistic or cautious outlook.

Most Popular Narrative: 40% Undervalued

Nokia Oyj last closed at €9.16, while the most followed narrative, according to TheTurntTomato, points to a fair value of €15.16. That gap frames the current debate around whether recent AI and defense news flow is fully baked into the price.

Nokia delivered a strong second quarter, reporting revenue of €4.815 billion and earnings per share of €0.07, supported by growing demand for AI and cloud-related solutions. The company is also expanding its presence in the defense sector through AI-powered tools for 5G networks, creating additional opportunities to diversify revenue and strengthen long-term growth prospects.

See why 10 investors see Nokia Oyj as 40% undervalued.

Result: Fair Value of €15.16 (UNDERVALUED)

Still, Nokia Oyj faces real pressure if AI demand cools or if defense contracts arrive slower than investors backing the 40% undervalued story expect.

Find out about the key risks to this Nokia Oyj narrative.

Another View: Nokia Oyj Through Earnings Multiples

There is a different story when you look at Nokia Oyj through its P/E ratio. The shares trade at about 73.1x earnings, compared with a 51.6x fair ratio estimate, a 20x European communications sector average, and a 37.4x peer group level. That is a steep premium, which can mean valuation risk if future progress falls short of expectations.

For anyone weighing whether this premium is justified by Nokia Oyj’s AI and defense ambitions, the detailed ratio breakdown is a useful cross-check on the optimism already in the price, and a prompt to ask how much upside is left if the market shifts focus back to earnings quality. See what the numbers say about this price — find out in our valuation breakdown.

HLSE:NOKIA P/E Ratio as at Sep 2026
HLSE:NOKIA P/E Ratio as at Sep 2026

Next Steps

If Nokia Oyj’s mixed signals leave you torn, act quickly: check the underlying data for yourself and weigh both the upside and the downside. To see both sides laid out in one place, review the 2 key rewards and 3 important warning signs

Looking For More Investment Ideas Beyond Nokia Oyj?

If Nokia Oyj has sharpened your focus on AI and communications, do not stop there. Broader idea hunting can help balance your next move.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.