Nokia beats profit estimates as AI and cloud sales double

Nokia beat second-quarter profit expectations as sales to AI and cloud customers surged 105% from a year earlier, a sign that spending is moving deeper into the network stack beyond chips and hyperscale data centers. The Helsinki-based telecom gear maker said total net sales rose 9% on a constant-currency basis, or 8% reported, in its July 23 second-quarter and half-year 2026 results.

The strongest growth came in the parts of the business most closely tied to AI buildout. Network Infrastructure net sales increased 12% on a constant-currency basis, led by Optical Networks, which grew 20%, and IP Networks, which rose 16%. That matters because carriers and large enterprise customers are not just buying more compute for AI workloads; they are also upgrading the transport systems, routing hardware and optical links needed to move data reliably at scale. Nokia has pitched its optical, IP and datacenter switching products as the tools that help customers get a return on AI investment, and the latest quarter suggests that message is finding buyers.

Margins also improved. Nokia said comparable gross margin expanded to 46.0% from 45.3% a year earlier, while reported gross margin rose to 44.6% from 44.0%. Reported earnings still included restructuring charges, but comparable operating profit improved, indicating the quarter was driven by both stronger demand and better operating performance rather than by a single accounting boost.

The results extend momentum from the first quarter, when AI-related sales helped lift Nokia’s performance and pushed the stock to a 16-year high after an earnings beat. For investors trying to judge whether AI infrastructure is creating a real spending cycle in telecom equipment, the latest numbers point in the same direction: demand is showing up not only in the most visible names, but also in the vendors supplying the backbone.

That makes Nokia a useful proxy for whether the AI capex wave is broadening into a more durable network refresh. A 105% jump in AI and cloud sales, paired with double-digit growth in optical and IP equipment, is stronger evidence than a single profit beat that carriers and enterprise buyers are allocating money to the infrastructure layer. The next test is whether that spending holds through the rest of the year.