Story
Nokia Boosts Outlook as AI and Cloud Sales Double in Second Quarter
Summary
The Finnish telecommunications equipment maker reported second-quarter earnings that surpassed analyst expectations and raised its full-year profit forecast, citing a surge in demand from AI and cloud infrastructure clients.
Nokia (NOKIA) shares gained on Tuesday after the network equipment provider reported a significant second-quarter earnings beat and raised its full-year profit guidance, driven by a dramatic acceleration in demand from artificial intelligence and cloud customers.
Earnings Beat and Guidance Lift
The Finnish company announced strong financial results for the second quarter of 2026, providing a positive signal to investors and reinforcing its strategic direction. Key figures from the report include:
- Comparable Operating Profit: €434 million, an 18% year-over-year increase and well ahead of the roughly €382 million analysts had anticipated.
- Net Sales: €4.82 billion, representing a 9% rise on a constant-currency basis.
- Upgraded Outlook: Nokia raised its full-year 2026 forecast for comparable operating profit to a new range of €2.1 billion to €2.6 billion.
- Shareholder Return: The company declared a dividend of €0.04 per share.
AI and Cloud Demand Surges
The standout driver of the quarter's performance was the rapid expansion of Nokia's business with AI and cloud infrastructure clients. Sales to these customers more than doubled, rising 105% compared to the same period last year.
AdUnderscoring this momentum, order intake from AI and cloud clients reached €2.8 billion in the second quarter, nearly tripling the €1 billion booked in the first quarter. This demand directly benefited the Network Infrastructure segment, which grew 12% in constant currency, led by strong results in Optical Networks (+20%) and IP Networks (+16%).
Market Context and Analyst Reaction
The strong results helped ease investor concerns that had previously been raised by competitor Ericsson regarding rising AI-related component costs. Nokia's report demonstrated that robust demand is currently outpacing these cost pressures for the company.
In response to the earnings, JPMorgan reiterated its Overweight rating on the stock with an €18.00 price target, highlighting the significant profit beat. The stock opened sharply higher before paring some gains during the session, a move partially attributed to news of an additional €200 million in European restructuring charges. Despite this, the results provided tangible validation for the company's AI infrastructure strategy.
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