Nokia Corp. (NYSE:NOK) on Thursday posted first-quarter results, highlighting strong momentum in optical networking and a sharp jump in sales tied to AI and cloud customers.
Nokia Q1 Results
The Finnish company reported net sales of $5.26 billion (EUR 4.5 billion), up 4% year over year, but missed Benzinga’s estimates of $5.40 billion. EPS came at $0.06, missing estimates by 3% but increasing 67% year-on-year.
The company's Network Infrastructure segment grew 6% year over year, driven by a 20% increase in Optical Networks sales. Mobile Infrastructure sales grew 3% year over year with strength in Core Software (up 5%) and Technology Standards (up 10%). Sales growth at Radio Networks remained flat.
Justin Hotard, Nokia's president and CEO, said, “We are increasing our growth assumption for Optical and IP Networks and we are investing to capture accelerating demand from AI & Cloud customers.”
Nokia’s AI Surge: A Game Changer?
Hotard tied the quarter's performance to demand from AI and cloud buyers and said the company is leaning further into this market. AI & Cloud sales jumped 49% year over year in the quarter and now account for 8% of group sales. Nokia booked $1.17 billion (EUR 1 billion) in orders from those customers during the quarter.
Nokia raised its view for the AI and cloud addressable market, now expecting 27% compounded annual growth from 2025 to 2028, versus 16% previously estimated at its November capital markets day. The company said supply-chain lead times are stretching as investment activity scales up.
Optical Networks To Fuel Growth
The company, at the OFC optical conference in March, announced a suite of innovations in Optical Networks – four new Digital Signal Processors (DSPs) that power 13 new solutions – to boost network efficiency while reducing the total cost of ownership by up to 70%.
These products are expected to begin sampling in mid-2027, with volume production slated for the second half of that year. Nokia also said its indium phosphide manufacturing site in San Jose, CA, remains on schedule to start ramping output later in 2026.
Cybersecurity Partnership Strengthens Growth Outlook
On April 16, Nokia announced a partnership with Cinia to enhance cybersecurity through advanced DDoS protection for Finland's critical infrastructure. The offering leverages Nokia’s Deepfield platform, showcasing the company’s commitment to integrating network security and AI-driven solutions, which are increasingly prioritized by telecom investors.
2026 Outlook
For full-year 2026, Nokia maintained its comparable operating profit outlook of $2.34 billion (EUR 2.0 billion) to $2.93 billion (EUR 2.5 billion).
Nokia projects network infrastructure sales growth of 12% to 14% on a constant-currency and portfolio basis, including an assumption that optical and IP networks together grow 18% to 20%. It also guided for second-quarter seasonality, expecting net sales to rise 5% to 9% quarter over quarter and Q2 operating profit to represent 12% to 16% of the full-year total.
Benzinga Edge Stock Rankings indicate that the NOK has a Momentum score in the 93rd percentile. It maintains a strong price trend in the short, medium and long term with a good Value score in the 49th percentile.
Price Action: Nokia shares surged about 12% in pre-market trading.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by a Benzinga editor.
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