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The old telecom box is getting a new label
Nokia used to be the company you remembered from flip phones and indestructible bricks. Now? It’s trying to be the plumbing behind AI data centers, and that story is starting to show up in the numbers.
The company reported Q2 net sales of 4.82 billion euros, up 8% from a year ago and just ahead of Wall Street’s 5.59 billion-euro estimate. Adjusted earnings came in at 8 cents a share, also a touch better than expected. Not exactly a fireworks show, but enough to tell investors: the AI angle is no longer just marketing copy.
AI is doing the heavy lifting
The real eye-opener was Nokia’s AI and Cloud business, which more than doubled year over year, jumping 103% to 9.3% of total sales. The company also booked 2.8 billion euros in AI and cloud orders during the quarter, which is the kind of backlog number that makes growth investors sit up straight.
A few moving pieces here:
- Network Infrastructure revenue rose 12%, helped by Optical Networks and IP Networks.
- Mobile Infrastructure grew 6%.
- Full-year comparable operating profit guidance was raised to 2.1 billion euros to 2.6 billion euros.
In other words: the traditional telecom side is still doing its thing, but the AI stuff is becoming the main character.
The supply chain catch
CEO Justin Hotard also threw a bit of cold water on the party, warning that memory shortages may persist through 2027. That matters because AI hardware demand is great until the parts needed to build it get scarce and expensive. Nokia says it’s lining up longer-term supply deals, designing around the shortage, and planning to pass higher costs on to customers — a very corporate way of saying “we’ll do our best, but your bill may be bigger.”
Why investors should care
Nokia isn’t just riding an AI hype wave; it’s showing actual revenue growth, bigger orders, and better profit expectations. But the stock still has to navigate supply constraints, a chip-campus deal with NXP Semiconductors, and a tech partnership with NVIDIA that could take time to fully monetize.
Big picture: Nokia’s transformation story is getting more believable, but the supply chain is still the villain in the sequel.