Nokia raises profit outlook as AI demand doubles

Nokia ↗ 2.89% reported stronger-than-expected second-quarter earnings on Thursday, buoyed by surging demand from artificial intelligence and cloud infrastructure customers that has reshaped the Finnish company's business profile. The results prompted Nokia to raise its full-year profit outlook.

AI Supercycle Drives Results

Comparable operating profit rose 18% year-on-year to 434 million euros ($496 million) for the quarter ended June, well above the average analyst estimate of 382 million euros polled by LSEG. Net sales climbed 8% to 4.82 billion euros, or 9% on a constant-currency basis.Nokia+3

Sales to AI and cloud customers doubled during the quarter to 446 million euros, while the company secured 2.8 billion euros in new orders from the segment. CEO Justin Hotard said Nokia was benefiting from the AI "supercycle," noting that roughly half of those orders are expected to convert into revenue over the next 12 months.Investing.com+2

The growth was concentrated in Nokia's Network Infrastructure business, where sales rose 12% on a constant-currency basis, driven by a 20% jump in Optical Networks and 16% growth in IP Networks. Nokia has been expanding beyond traditional telecom equipment by supplying fibre-optic networking gear to hyperscale data center builders — a pivot championed by Hotard, who joined from Intel's ↗ 3.61% Data Center & AI Group.Investing.com

Raised Guidance Signals Confidence

Reflecting its confidence in sustained demand, Nokia raised its full-year comparable operating profit guidance to a range of 2.1 billion to 2.6 billion euros, up from a previous forecast of 2.0 billion to 2.5 billion euros. Comparable gross margin expanded 70 basis points to 46.0%, ahead of the 44.7% consensus.Economic Times+2

The results extend a trend that accelerated earlier this year. In the first quarter, AI and cloud sales grew 49% with 1 billion euros in new orders, prompting Nokia to raise its Network Infrastructure growth target to 12%-14% from 6%-8%. Nokia also announced the industry's first commercial AI-RAN platform, developed with Nvidia ↗ 0.90%, with pilot deployments set for late 2026.Reuters+2

Nokia shares had risen to their highest level since 2010 following the first-quarter beat in April. The company's transformation from a legacy telecom supplier into an AI infrastructure play now faces its next test: whether the current pace of hyperscaler spending can be sustained through 2027 and beyond.Reuters