Key Takeaways
- Q1 comparable operating profit jumped 54% year-over-year to €281 million, surpassing the €250 million analyst forecast
- The company reported net profit of €87 million, a significant turnaround from last year’s €60 million loss
- Revenue from AI and cloud customers skyrocketed 49%, generating approximately €1 billion in fresh orders
- The company upgraded its AI and cloud addressable market growth projection to 27% annually from 16%
- Shares reached their strongest level since April 2010, climbing up to 9% during early market activity
Nokia delivered first-quarter results that significantly exceeded Wall Street’s expectations, sending shares sharply higher. The telecommunications equipment manufacturer from Finland reported comparable operating profit of €281 million, representing a 54% year-over-year increase and topping the €250 million consensus estimate from analysts.
The company’s net profit reversed course dramatically, posting €87 million compared to a €60 million loss during the corresponding quarter last year. Operating margin expanded to 6.2% from 4.2% in the prior-year period.
Shares surged as much as 9% during early Thursday trading in Helsinki, reaching their highest price point since April 2010.
Comparable net sales totaled €4.5 billion during the three-month period, meeting market projections and representing 4% growth year-over-year on a constant currency basis.
The AI and cloud segment delivered exceptional performance, posting 49% revenue growth and representing 8% of total group sales. Fresh orders from AI and cloud clients reached approximately €1 billion throughout the quarter.
Optical Networks, which operates within the Network Infrastructure division, demonstrated the strongest performance with 20% organic expansion. The overall Network Infrastructure segment achieved 6% organic growth, while Mobile Infrastructure advanced 3%.
Company Elevates AI Market Growth Projections
Nokia increased its total addressable market growth projection for AI and cloud to a 27% compound annual growth rate spanning 2025 through 2028. This represents a substantial upgrade from the 16% forecast provided during its November investor presentation.
The Network Infrastructure TAM growth outlook was elevated to 12–14% from the earlier 6–8% projection. Optical and IP networks are now anticipated to expand at 18–20%, a significant increase from the previous 10–12% estimate.
CEO Justin Hotard attributed the revisions to an AI “supercycle,” noting that demand was intensifying and driving heightened investment in optical and IP network infrastructure.
The company maintained its full-year comparable operating profit guidance range of €2.0 billion to €2.5 billion, indicating performance was trending slightly above the midpoint.
Q2 Outlook Introduces Element of Caution
Despite the strong quarterly performance, not all indicators pointed upward. Nokia’s second-quarter operating profit guidance disappointed, coming in considerably below analyst expectations.
Management projected Q2 operating profit at 12–16% of full-year operating profit, suggesting a figure approximately 20% below consensus at the range’s midpoint.
Free cash flow also deteriorated, swinging to negative €353 million from positive €629 million in Q4 2025.
Barclays, which maintains an “underweight” rating on Nokia with a €5.20 price target, characterized the quarter as “broadly neutral.” The investment bank noted near-term concerns stemming from the disappointing Q2 profit outlook while recognizing Nokia’s expanding AI market presence.
The brokerage stated that AI RAN trials were progressing as planned but observed “little to get excited about on the mobile side.”
The Q2 revenue guidance did suggest potential upside relative to consensus, with the company forecasting 5–9% sequential expansion.
Nokia’s optical division has emerged as a critical growth catalyst following its purchase of U.S.-based Infinera, which elevated it to among the world’s leading producers of optical transport systems.
The company verified that AI and cloud orders during the quarter totaled approximately €1 billion.
