Nokia Q3 Comparable Operating Profit Jumps 35% as AI Networking Demand Accelerates

Nokia Q3 Comparable Operating Profit Jumps 35% as AI Networking Demand Accelerates

Nokia announced third‑quarter earnings on October 22. Demand from intelligence and cloud infrastructure customers helped lift Nokia’s comparable operating profit by 35% year on year. The Finnish telecommunications equipment maker recorded operating profit of €605 million compared with €448 million a year earlier while net sales increased to €5.154 billion.

These results underline how investment in AI infrastructure creates opportunities for companies that build the networking systems that connect data centres. Nokia also kept its full‑year 2026 operating‑profit outlook of €2.1 billion to €2.6 billion signalling that Nokia remains confident in its broader financial targets.

AI and cloud customers drive growth

The standout figure was Nokia’s 123% year‑on‑year increase in sales to AI and cloud customers. Orders from those customer groups also strengthened, with order intake rising 118% to €1.5 billion during the quarter.

AI systems need more than processors. Large‑scale model training and deployment depend on connections between servers, storage systems and data centres. As computing workloads grow operators need networking equipment that can move volumes of information with low delay and high reliability.

Nokia supplies technologies used in this infrastructure including networking and IP networking equipment. Optical networks transmit data using light while IP networks direct data traffic across systems. Both can become important as cloud operators expand facilities and connect computing capacity across locations.

Nokia’s Network Infrastructure business reported sales of €2.158 billion up 17% on a reported basis and 15% on a constant‑currency basis. Within that business IP Networks sales grew 43% year on year while Optical Networks sales increased 18%.

The figures suggest that demand spreads across than one networking category. They do not by themselves establish how much of the increase came directly from AI workloads than other customer requirements.

Earnings beat expectations,. Reported profit fell

Nokia’s €605 million comparable operating profit exceeded the average analyst estimate of €453 million in a company‑provided poll cited by Reuters. Comparable net sales also rose 10% from the prior‑year quarter reaching €5.154 billion.

However the distinction between reported earnings is important. Nokia’s reported operating profit fell 22% to €196 million from €252 million a year. Reported operating margin declined to 3.8% compared with 5.4% in the quarter of 2025.

The company said accelerated restructuring and integration costs affected its reported operating margin. Comparable operating margin by contrast improved to 11.7% from 9.5% reflecting sales and operating efficiency.

The two measures offer views of the quarter. Comparable figures are intended to show underlying business performance after specified adjustments while reported figures include costs that can weigh on the results. Investors therefore need to consider both when assessing whether growth is translating into lasting profitability.

Full‑year outlook remains unchanged

Nokia retained its full‑year operating‑profit outlook of €2.1 billion to €2.6 billion. The company said it expects net sales to increase 20% to 24% sequentially and anticipates full‑year comparable operating profit above the midpoint of its guidance range.

Management also expects the Optical and IP Networks businesses to grow between 25% and 30% in 2027. That forecast points to continued optimism about demand for network infrastructure although it remains a forward‑looking projection than a guaranteed outcome.

Nokia is also continuing the integration of Infinera the networking company it acquired. The company said it remains on track to complete the integration by the end of 2026 a year of its original schedule and expects €200 million in net synergies.

The potential benefits will depend on execution, customer demand and the company’s ability to manage costs while expanding production and delivery capacity.

What the results mean for the AI infrastructure market

Nokia’s results provide another indication that the AI investment cycle is reaching beyond chipmakers and into the equipment needed to connect computing resources. As AI workloads expand data‑centre operators may need switching, higher‑capacity optical links and networks that can handle heavier traffic between sites.

That creates an opportunity for established networking suppliers.. The growth figures should not be read as proof that every part of Nokia’s business is accelerating at the same rate. Nokia’s results varied, across its operations and its reported operating profit remained below the prior‑year level.

Nokia also faces risks such as competition disruptions in the supply chain shortages of components and changes in customers’ investment plans. If spending on AI infrastructure. If customers postpone buying equipment some of the expected growth might be delayed into later periods.

I note that Nokia’s recent results show strong momentum in AI and cloud‑related networking and Nokia is improving margins while keeping the full‑year outlook intact. Investors will be watching whether the growth in orders turns into revenue and cash flow while restructuring costs and the Infinera integration continue to be important factors, in Nokia’s reported performance.