Finish telecom gear maker Nokia has reported a bigger than expected rise in its quarterly comparable operating profit, citing a boost from artificial intelligence (AI) and cloud customers.
Comparable operating profit jumped 18% to 434 million euros (USD 496.11 million) in Q2 2026. That was above the average estimate of 382 million euros from analysts polled by LSEG. Comparable net sales reached 4.82 billion euros in the quarter, above market estimates. 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.
While the uptick in profit numers validates the venture’s shift in focus to sell fibre-optic equipment to big tech companies building AI data centres, Nokia has not been immune to the sudden increase in memory chip prices, as AI companies keep on cornering the market and impacting telecom equipment makers.
“Demand remains strong, while supply continues to be the main industry constraint, prompting our customers to place longer-term orders,” CEO Justin Hotard said, while addressing the analysts and the investors.
Since joining Nokia in 2025, Hotard, a veteran of Intel’s Data Center & AI Group, has focused on expanding the Finnish venture’s data center business. He even made a billion-dollar deal with chipmaker Nvidia. AI and cloud business now account for 8% of the group’s sales, and the company expects that addressable market to grow by 27% annually until 2028.
Despite the increase in chip prices, Nokia has 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. Rival Swedish telecoms equipment maker Ericsson, on the other hand, has been under severe pressure from rising memory chip costs driven by surging AI demand, fanning investor worries that margins would be hit and sending its shares tumbling.
Hotard-led Nokia’s AI pivot comes at a time when Europe is facing constraints at the regulatory and energy fronts. As per Nokia’s assessment, the continent also lacks the infrastructure needed to build up AI data centers. The policymakers have also been incapable of preventing businesses from moving to China and the United States.
“The issue today is Europe doesn’t have the infrastructure,” Hotard told in his recent interview with Reuters, while praising some of the European Union’s moves, such as the establishment of AI gigafactories.
“But I think when you look at the relative pace of investment, I’m not sure it’s enough. And it’s not just about putting these factories in. You need connectivity. You need data center capacity,” he remarked, while adding that data centers, which account for 3% of the EU electricity demand, will see a rapid consumption uptick due to the AI expansion.
Amazon, for example, has been facing long delays to get power grid connections, which are challenging the company’s data center expansion in Europe.
“We’ve seen the movie before, right? If you don’t build that infrastructure, then ultimately the business and the developers will move to where that is. The reality is right now, that’s in China and in the U.S. for the large part,” Hotard said.