Electric-field stimulation of neuronal activity can be used to improve the speed of regeneration for severed and damaged nerves. Most techniques, however, require invasive electronic circuitry which can be uncomfortable for the patient and can damage surrounding tissue. A recently suggested technique by Sliow et al instead uses a graft-antenna - a metal ring wrapped around the damaged nerve - powered by an external magnetic stimulation device. This technique requires no electrodes and internal circuitry; all power is provided wirelessly. This paper examines the microscopic mechanisms which allow the magnetic stimulation device to cause neural activation via the graft-antenna. A computational model of the system was created and used to find that under magnetic stimulation, diverging electric fields appear at the metal ring’s edges. If the magnetic stimulation is sufficient, the gradients of these fields can trigger neural activation in the nerve. In agreement with in vivo measurements on rat sciatic nerves, direct contact between the antenna and the nerve ensures neural activation given sufficient magnetic stimulation. Simulations also showed that the presence of a thin gap between the graft-antenna and the nerve does not preclude neural activation but does reduce its efficacy.