The company announced on Thursday that its comparable operating profit rose 18 per cent to €434 million ($496.1 million) in the second quarter of 2026, surpassing analysts’ average forecast of €382 million, according to an LSEG poll.
The solid performance was supported by Nokia’s strategic expansion into supplying fibre-optic networking equipment for major technology companies investing heavily in AI data centres.
AI Expansion Drives Revenue Growth
Nokia has increasingly shifted its business beyond traditional telecom operators, positioning itself as a key supplier to global technology firms building next-generation AI infrastructure.
The strategy is already yielding results, with revenue from AI and cloud customers doubling during the quarter to €446 million.
The company also secured €2.8 billion in new orders, reflecting sustained demand for networking solutions required to support the rapid expansion of AI computing and cloud services.
Comparable net sales climbed to €4.82 billion, exceeding market expectations and reinforcing investor confidence in the company’s transformation strategy.
Chief Executive Officer Justin Hotard said customer demand remained strong despite supply challenges affecting the industry.
“Demand remains strong, while supply continues to be the main industry constraint, prompting our customers to place longer-term orders,” Hotard said.
Hotard Deepens Nokia’s AI Strategy
Since taking over as CEO last year after leading Intel’s Data Center & AI Group, Hotard has accelerated Nokia’s push into the fast-growing AI infrastructure market.
One of the key milestones in that strategy has been a billion-dollar partnership with chipmaker Nvidia, aimed at strengthening Nokia’s position in the rapidly expanding data centre ecosystem.
The company’s increased focus on AI-related networking solutions has helped diversify its revenue streams beyond its traditional telecommunications equipment business.
Industry Faces Rising Component Costs
Despite the strong results, Nokia acknowledged that it continues to face industry-wide challenges stemming from the sharp increase in memory chip prices.
The surge in demand from AI companies has tightened global supply, driving up component costs for telecommunications equipment manufacturers.
Last week, Swedish rival Ericsson warned that higher memory chip prices were putting pressure on its margins, triggering a decline in its share price and raising investor concerns across the sector.
However, Nokia’s stronger sales performance and expanding AI business have helped offset those cost pressures.
Company Raises Full-Year Profit Guidance
Reflecting confidence in its outlook, Nokia raised its comparable operating profit forecast for the full year.
The company now expects operating profit to reach between €2.1 billion and €2.6 billion, compared with its previous guidance of €2.0 billion to €2.5 billion.
The improved outlook signals management’s expectation that continued investments in AI infrastructure, cloud computing and data centres will remain key drivers of growth, positioning Nokia to benefit from one of the fastest-growing segments of the global technology industry.