Finnish telecom equipment maker Nokia delivered impressive third-quarter results that exceeded analyst expectations. According to reports from The Economic Times, the company's adjusted operating income rose to 605 million euros ($680.20 million) in Q3 2026, compared to 448 million euros in the same period last year. This performance beat the average analyst estimate of 454 million euros, demonstrating strong operational execution. The company benefited from delivering some of its backlog of data-center equipment during the quarter.
The company's financial momentum was further supported by robust revenue growth. As reported by The Economic Times, net sales for the period rose 10% to 5.2 billion euros, a little above analyst estimates, fueled by a boom in demand from AI and cloud customers. Nokia's shares have responded positively to these results, gaining 48% so far in 2026, reflecting investor optimism around the company's growth prospects amid rising demand for AI-related infrastructure and cloud networking equipment. However, shares slipped about 1% on Thursday morning in Helsinki as investor sentiment toward the AI trade weakened, with a UBS basket of European stocks seen benefiting from AI declining 2.9%.
The standout performance was driven by exceptional demand from emerging technology sectors. According to The Economic Times, order intake from AI and cloud customers surged 118% year-on-year to 1.5 billion euros in the third quarter. This dramatic increase in orders from these high-growth segments has emerged as an increasingly important growth driver for Nokia, positioning the company well for continued expansion in the artificial intelligence and cloud infrastructure markets. The rapid expansion of AI infrastructure has created challenges for equipment makers, with supplies of components such as memory chips constrained and prices rising.
As part of its pivot toward data centers, Nokia acquired optical-networking company Infinera last year and expects to fully integrate the business by the end of 2026. The company anticipates benefiting from 200 million euros in cost synergies from this acquisition. CEO Justin Hotard is seeking to make data centers a bigger source of growth for Nokia as demand from traditional telecommunications customers remains subdued following a sluggish buildout of 5G networks. The company is also working with Nvidia Corp. on mobile-network equipment that uses the US chipmaker's advanced chips, positioning Nokia for a future where AI computing extends beyond data centers into communications networks.
Looking ahead, Nokia management expressed confidence in sustained growth momentum. As reported by The Economic Times, CEO Justin Hotard projects combined growth of 25% to 30% in 2027 for the company's optical and IP networks businesses. The company is expanding capacity to alleviate production bottlenecks, with its second facility in San Jose, California expected to be fully up and running by the end of the month. However, there are still constraints in other parts of the semiconductor supply chain. There are signs that Nokia's customers are bringing forward orders, with sales in its mobile infrastructure division up 5% year-on-year to 2.9 billion euros, above analyst estimates of 2.8 billion euros, driven by an acceleration of revenue from the fourth quarter.
