Beyond the China Retreat: Whether Nokia’s Surge Was Built on Substance

Nokia (NOK) shares rose 2.3% in premarket trading, set for a third straight gain, following Google's $15.1B AI investment in Finland and Nokia's return to the Euro Stoxx 50 index. Google (GOOGL) announced a €13B investment in Finnish AI infrastructure, with Nokia supplying connectivity. Nokia's return to the index is set for September 21, replacing Volkswagen. GOOGL stock dropped 1.7%, with retail sentiment turning 'extremely bearish.'

Alphabet's Google plans to invest 13 billion euros in Finland over two years, building three new data centers and expanding an existing one. The project aims to leverage Finland's climate and renewable energy for AI infrastructure. Local companies like Fortum Oyj, Nokia Oyj, and Elisa Oyj are expected to benefit. Google's investment is part of a broader 43 billion-euro data center expansion in Finland, with the company estimating 16,000 construction jobs.

Nokia (NOK) stock rose 1% overnight after JPMorgan highlighted its AI and cloud potential, maintaining an 'Overweight' rating with a $21 price target. JPMorgan expects stronger earnings in 2027-2028 due to a robust order pipeline. Nokia's Q2 sales grew 8% YoY to €4.815B, with AI and cloud orders doubling. The company also plans to reduce operations in China.

Nokia Oyj will rejoin the Euro STOXX 50 index, while Volkswagen will be removed. Nokia's shares have more than doubled since 2025, driven by a focus on AI data center equipment. The company reported an 18% increase in Q2 operating profit to €434 million. Nokia is also expanding in Saudi Arabia with a new R&D center. Volkswagen shares have dropped 27% this year due to competition and restructuring.

Nvidia's latest 13F filing shows a $63.4B US stock portfolio, with Intel and SpaceX making up 80% of the value. The portfolio's value tripled in three months, despite no changes in positions. Nvidia's investments are primarily in companies within its supply chain, including suppliers and customers, according to the filing.

Nokia's stock fell 3.59% to $10.21 on Friday, reducing its market cap by $2.2 billion. The company's valuation is 26.2x projected 2026 earnings, with an average analyst price target of $12.85. The decline followed Fed comments on inflation and rising rate forecasts, impacting high-growth tech stocks.