Nokia reported a stronger-than-expected second quarter as booming demand from artificial intelligence (AI) and cloud customers helped offset ongoing challenges in the broader telecom equipment market. The Finnish networking company posted an 18% year-over-year increase in comparable operating profit, while sales to AI and cloud customers more than doubled, prompting management to raise its full-year profit outlook.
The results highlight Nokia’s successful shift beyond traditional telecom infrastructure toward AI data center networking, optical networking, and cloud connectivity. As hyperscalers accelerate investments in AI infrastructure, Nokia has emerged as a key supplier of high-speed networking equipment, generating strong order momentum despite rising component costs.
AI and Cloud Demand Drives Strong Q2 Performance
Nokia’s comparable operating profit rose to €434 million ($496 million) during the second quarter, comfortably exceeding analysts’ consensus estimate of €382 million.
The company also reported:
- AI and cloud customer sales more than doubled.
- AI and cloud revenue reached €446 million.
- New AI-related orders totaled €2.8 billion.
- Group net sales increased to €4.82 billion, ahead of market expectations.
Q2 Financial Highlights
| Metric | Q2 2026 | Market Expectation |
|---|---|---|
| Comparable Operating Profit | €434 million | €382 million |
| Group Revenue | €4.82 billion | Beat expectations |
| AI & Cloud Revenue | €446 million | More than doubled |
| AI & Cloud Orders | €2.8 billion | Strong growth |
Data Center Strategy Gains Momentum
Nokia’s growing presence in AI infrastructure has become a major growth driver under CEO Justin Hotard, who previously led Intel’s Data Center & AI business.
The company has expanded its portfolio through:
- High-speed optical networking.
- AI data center networking solutions.
- Cloud infrastructure connectivity.
- Strategic partnerships, including a billion-dollar agreement with Nvidia.
These investments have positioned Nokia to benefit from surging global spending on AI infrastructure by hyperscalers and enterprise cloud providers.
Network Infrastructure Business Leads Growth
Nokia’s Network Infrastructure division continued to outperform its traditional telecom businesses.
Growth was fueled by:
- AI data center deployments.
- Cloud provider investments.
- Strong demand in the Americas.
- Expanding optical networking projects.
Meanwhile, its Mobile Infrastructure business also delivered growth, supported by improving demand across Asia-Pacific and Europe, the Middle East, and Africa (EMEA).
Business Performance
| Business Segment | Key Driver |
|---|---|
| Network Infrastructure | AI data centers and cloud networking |
| Optical Networking | Hyperscaler investments |
| Mobile Infrastructure | Improving telecom demand |
| AI & Cloud Business | Record customer orders |
Nokia Raises Full-Year Profit Outlook
Buoyed by strong first-half performance, Nokia increased its comparable operating profit guidance for 2026.
Updated Outlook
| Guidance | Previous | New |
|---|---|---|
| Comparable Operating Profit | €2.0–€2.5 billion | €2.1–€2.6 billion |
Management said continued investments by cloud providers and AI companies should support sustained demand throughout the remainder of the year, although higher memory chip prices and supply constraints remain areas to watch.
AI Infrastructure Becomes Nokia’s Growth Engine
The latest results illustrate how Nokia has transformed from relying primarily on telecom carrier spending to becoming an important supplier for AI infrastructure.
Key trends supporting the company include:
- Rapid expansion of AI data centers.
- Growing cloud networking investments.
- Rising demand for optical interconnects.
- Increasing enterprise AI deployments.
Unlike previous telecom spending cycles driven mainly by 5G rollouts, AI infrastructure investments are creating a new, faster-growing revenue stream for networking equipment providers.
Looking Ahead
Nokia’s second-quarter performance underscores how the global AI investment cycle is reshaping the networking industry. By expanding its presence in AI data center networking and cloud infrastructure, the company is reducing its dependence on traditional telecom spending while capitalizing on one of the fastest-growing segments of enterprise technology.
Looking ahead, continued investments by hyperscalers and AI companies are expected to support demand for high-speed networking equipment, optical infrastructure, and cloud connectivity solutions. While rising memory chip costs and supply constraints could pressure margins, Nokia’s growing AI order backlog and improved full-year guidance suggest the company is well positioned to benefit from the next phase of AI infrastructure expansion.
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