Nokia stock price plunges 8% on a potential loss of Verizon business, stock downgrade
- JPMorgan downgrades Nokia stock to “neutral” from “overweight”
- "We believe that there is a real risk Verizon will depend less on Nokia as their primary RAN" - JPM
- Nokia stock price drops 8% to break below an important supporting trend line
Shares of Nokia (EPA: NOKIA) have plunged around 8% in today’s trading session after JPMorgan warned that the tech firm may lose Verizon, one of Nokia’s key clients. Nokia stock price has now erased all gains from earlier in the week, trading nearly 7% in the red on a weekly chart.
Fundamental analysis: JPM downgrades the stock
JPMorgan, the US-based banking giant, downgraded Nokia stock to “neutral” from “overweight”. The bank said that there’s a “real risk” that Nokia may lose Verizon business, one of its biggest clients.
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“We believe that there is a real risk Verizon will depend less on Nokia as their primary RAN (radio access network) supplier going forward,” JPM said in a note. According to the JPM, Verizon may have started to use Samsung.
According to the JPM, Verizon may have started to use Samsung.
“Consider the JPM report on the Verizon-Nokia situation is based on some facts. So far, Verizon ran some tests with its vendor for its 5G RAN and I’ve heard that Samsung did better than Nokia,” said a South Korean analyst.
In the past, the US-based carrier has mostly relied on Nokia for the RAN components. This type of device provides radio access and assists to coordinate network resources across wireless devices. It is also seen as a key part of the booming 5G infrastructure.
As expected, Nokia dismissed speculations.
“Nokia is proud to serve Verizon, and we are committed to continuing to help them build the best, most reliable and highest performing network,” Nokia spokesman said.
Invezz reported last month that Nokia announced a partnership with Broadcom to develop 5G chips.
Technical analysis: Shares tumble
Nokia stock price tumbled around 8% this morning on the JPM stock downgrade. Shares have now printed a 3-week low at 3.675, erasing strong gains made on Monday. Today’s plunge comes just two days after Nokia share price hit an 8-month high at 4.19.
As seen in the daily chart above, the price action has now broken below the ascending trend line. We wouldn’t be surprised to see an acceleration of a bearish run towards key horizontal support near the 3.50 mark.
Nokia stock price has plunged 8% today after the firm is reported to be at risk of losing Verizon business. According to JPMorgan, Verizon may have started to use Samsung for RAN components, reducing its dependence on the Finnish tech giant.
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