Nokia Q2 profit beats forecasts as AI data-centre sales double
Nokia’s shift away from sluggish 5G spending towards AI infrastructure is paying off, but soaring chip costs and heavy restructuring charges leave the Finnish equipment maker with a difficult second-half target to hit.
Nokia posted a comparable operating profit of €434m for the second quarter, an 18% increase that comfortably beat analyst forecasts of €382m. Net sales rose 8% to €4.82bn, extending a turnaround that began with a 54% profit jump in the first quarter.
The growth was driven almost entirely by the Network Infrastructure division, where sales climbed 12% to €2.04bn. Optical networking and IP routing sales surged by 20% and 16% respectively, as hyperscalers rushed to wire together AI clusters and connect distant data centres. Revenue from AI and cloud customers more than doubled to €446m.
That demand is translating into a heavy order backlog. Nokia booked €2.8bn in fresh AI and cloud orders during the quarter, far outstripping what it actually shipped. “Demand remains strong, while supply continues to be the main industry constraint, prompting our customers to place longer-term orders,” chief executive Justin Hotard said.
The company’s traditional mobile networks business grew a steadier 6% to €2.68bn as 5G spending stabilises. However, this legacy segment remains exposed to record-high memory chip prices, a cost pressure also flagged by rival Ericsson. The underlying strength of the quarter also masked a messier reported bottom line: one-off charges pushed Nokia to a reported operating loss of €50m.
Those charges include €800m in restructuring costs planned for 2026, covering operations in China, Europe, and previous cost-cutting programmes. Nokia held its quarterly dividend steady at €0.04 a share.
Management raised its full-year comparable operating profit guidance to between €2.1bn and €2.6bn, though €0.1bn of the increase came from a technical accounting adjustment. Hotard said the company is on track to finish “somewhat above the midpoint” of that range. However, with only €715m earned in the first half, hitting the top of the new target requires generating roughly €1.9bn in the second half. Investors will watch the third quarter closely to see if the massive AI order book can convert into actual revenue fast enough to meet that back-loaded schedule.
