Nokia Beats Earnings Forecast as AI Data Center Demand Accelerates
Nokia raised its growth targets for artificial intelligence business on Thursday after the Finnish network equipment maker reported first-quarter comparable operating profit of 281 million euros ($329 million), surpassing analyst estimates of 250 million euros. The company's shares climbed nearly 7% in early trading, reaching their highest price since April 2010.
Sales Growth Driven by Hyperscaler Demand
Net sales from AI and cloud customers jumped 49% in the quarter, driven by large cloud service providers building data centers that depend on fiber optic cables. Nokia booked 1 billion euros in new orders from this segment.
Total comparable net sales reached 4.5 billion euros, matching market expectations. The company now manufactures optical transport systems globally after acquiring U.S.-based Infinera.
Revised Market Outlook
Nokia increased its annual growth forecast for the AI and cloud addressable market to 27% through 2028, up from 16% estimated in November. This revision reflects accelerating demand from hyperscalers for network infrastructure.
The network infrastructure segment is now expected to grow 12% to 14% this year, compared with the January forecast of 6% to 8%. This upgrade stems from strength in optical and IP networks.
Full-Year Guidance
CEO Justin Hotard said the company is "currently tracking somewhat above the mid-point" of its full-year comparable operating profit guidance of 2.0 billion to 2.5 billion euros.
For finance professionals tracking technology sector exposure, Nokia's results demonstrate how infrastructure companies benefit from enterprise spending on AI infrastructure-a shift distinct from software and services growth. Understanding these dynamics can inform capital allocation decisions across the tech sector.
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