Nokia and Nvidia surprised on Tuesday afternoon by announcing their cooperation and Nvidia’s billion dollar investment in Nokia.
On Tuesday, Nokia’s share price rose by around 21 percent in Helsinki to 6.59 euros, and in New York, the dollar-denominated quotation of the share already jumped to seven euros.
Since then, some investors have taken the profits home. The share price had risen above six euros for the first time since 2016. The share had received a strong boost already on October 23. in the earnings release, where the CEO Justin Hotard predicts good successes in artificial intelligence business operations.
After the news day, the share price has fallen by a heartbeat, -4.3 percent on Wednesday and -2.1 percent on Thursday. At 17:00 on Friday, Nokia’s share price was 5.89 euros, a decrease of 4.6 percent. Compared to the Monday’s closing price before the Nvidia news, the stock was up about eight percent. More than half of the news day’s leverage has thus already melted.
Experts have agreed that the Nvidia collaboration is good news for Nokia. In practice, however, the cooperation does not show up in Nokia’s earnings immediately, and the stock has now been more expensive than before using valuation metrics based on earnings forecasts.
Investors are waiting for 19.11. to be held on Nokia’s capital market day. In this case, Nokia’s management opens up the importance of cooperation in the near-term and longer-term prospects of the business in more detail.