Nokia Q2 profit beat as sales from AI, cloud doubled
Strong Quarterly Performance Driven by AI and Cloud Demand
By Supantha Mukherjee
Quarterly Financial Highlights
STOCKHOLM, July 23 (Reuters) - Nokia reported a bigger than expected rise in its quarterly comparable operating profit on Thursday, as the Finnish telecom gear maker got a boost from artificial intelligence and cloud customers, and expects the growth to continue.
Operating Profit and Analyst Estimates
Comparable operating profit jumped 18% to 434 million euros ($496.11 million) in the second quarter of 2026. That was above the average estimate of 382 million euros from analysts polled by LSEG.
Strategic Focus on AI Data Centres
Nokia has been shifting its focus to selling fibre-optic equipment to big tech companies building AI data centres. The company, however, was not immune to the sudden increase in memory chip prices due to AI companies cornering the market and impacting telecom equipment makers.
CEO Comments and Industry Constraints
"Demand remains strong, while supply continues to be the main industry constraint, prompting our customers to place longer-term orders," CEO Justin Hotard said in a statement.
Leadership and Business Expansion
Since joining Nokia last year, Hotard, who came from leading Intel's Data Center & AI Group, has focused on expanding the Finnish group's data centre business. He even made a billion-dollar deal with chipmaker Nvidia.
Sales Growth from AI and Cloud Customers
Comparable net sales reached 4.82 billion euros in the quarter, above market estimates. The Espoo, Finland-based group said net sales from AI and cloud customers doubled in the quarter to 446 million euros, as it booked 2.8 billion euros in new orders.
Industry Context and Outlook
Competitive Landscape
Rival Swedish telecoms equipment maker Ericsson warned last week that it was under pressure from rising memory chip costs driven by surging AI demand, fanning investor worries that margins would be hit and sending its shares tumbling.
Updated Guidance
Nokia, however, increased its full-year comparable operating profit guidance range to between 2.1 billion euros and 2.6 billion, from 2 billion euros and 2.5 billion euros.
Currency Exchange Rate
($1 = 0.8748 euros)
(Reporting by Supantha Mukherjee in Stockholm, editing by Terje Solsvik)
