Nokia Q2 net sales rise 8% as AI and Cloud demand more than doubles
Nokia posted second-quarter net sales of EUR 4.815 billion on 23 July 2026, an 8% increase on a reported basis and 9% in constant currency terms, driven by surging demand from hyperscalers and cloud infrastructure operators. The Finnish telecoms equipment maker said revenue from AI and Cloud customers more than doubled year-on-year, with Q2 AI and Cloud order intake reaching EUR 2.8 billion.
President and chief executive Justin Hotard said the results demonstrate that Nokia's strategy, centred on what the company describes as the AI supercycle opportunity, is delivering. "We enter the second half with momentum and remain on track to deliver somewhat above the midpoint of our comparable operating profit guidance," he said.
Divisional performance and optical expansion
Within Nokia's Network Infrastructure division, which reported 12% net sales growth in constant currency terms, Optical Networks grew 20% and IP Networks grew 16% year-on-year. Those two sub-segments are now expected to grow a combined 18 to 20% for the full year. Mobile Infrastructure net sales grew 6% in constant currency, with a stable profit contribution driven by product mix.
Comparable gross margin expanded 70 basis points to 46.0%, and comparable operating margin rose 70 basis points to 9.0%. On a reported basis, operating margin fell 430 basis points to negative 1.0%, reflecting an accelerated restructuring programme. Nokia now expects EUR 800 million in total restructuring charges in 2026, including EUR 200 million from additional programmes primarily in Europe and EUR 350 million tied to the integration of its China joint venture. The company said it is tracking towards the high end of its 2023 to 2026 cost-savings target range of EUR 800 million to EUR 1.2 billion.
Nokia also announced it has agreed to acquire NXP's Chandler semiconductor fabrication campus in Arizona, where it plans to convert production to Indium Phosphide components for optical networking. The site will initially be leased from early 2027, with full acquisition expected to close in Q1 2029. A new San Jose optical fabrication facility is on track to begin ramping production in Q4 2026, and Nokia said it is investing to increase its advanced test and packaging capacity in Pennsylvania by ten times beginning in Q3 2026. Supply constraints, rather than demand, remain the binding factor in the optical market, prompting customers to place longer-dated forward orders.
Market context and competitive landscape
Nokia's optical and IP networking gains place it in direct competition with Ciena, Infinera (now part of Nokia following its 2024 acquisition), and Cisco in the high-capacity backbone market, as well as with Juniper Networks and Huawei in IP routing. The doubling of AI and Cloud revenues underscores a structural shift: hyperscalers building out GPU clusters and large-scale inference infrastructure are pulling through demand for 400G and 800G optical interconnects and high-throughput routers, a trend that is reshaping the revenue mix of every major network equipment vendor.
Nokia also highlighted the commercial launch of what it describes as the industry's first AI-RAN platform, claiming the technology can deliver more than 100% spectral efficiency gains by 2028 in 5G networks, with a software upgrade path to 6G. The AI-RAN space is attracting growing investment from Ericsson, Samsung and a number of open-RAN software specialists, so Nokia will need to demonstrate commercial traction beyond the initial launch to sustain a differentiated position.
Nokia's full-year comparable operating profit guidance was revised upward by EUR 0.1 billion to a range of EUR 2.1 billion to EUR 2.6 billion, a technical adjustment reflecting the reclassification of the Fixed Wireless Access CPE and Enterprise Campus Edge businesses as discontinued operations. Nokia has agreed to sell the Fixed Wireless Access CPE unit to Inseego. The company expects net sales to grow 3 to 7% sequentially in Q3, with a meaningful uplift in operating profit reserved for Q4 on the back of software revenue phasing. Q3 and full-year results are scheduled for 22 October 2026.