Nokia Posts Strong Q1 2026 Growth Driven by AI and Cloud Demand
Nokia has reported a strong start to 2026, driven by accelerating demand in AI and cloud-driven infrastructure markets. The company highlighted growing momentum in Optical ......
Black News 
Nokia has reported a strong start to 2026, driven by accelerating demand in AI and cloud-driven infrastructure markets. The company highlighted growing momentum in Optical and IP Networks, alongside increased investment to capture emerging opportunities.
“We are increasing our growth assumption for Optical and IP Networks and we are investing to capture accelerating demand from AI & Cloud customers.”
– Justin Hotard, President and CEO
In its Q1 2026 interim financial results, Nokia recorded net sales growth of 4% on a constant currency and portfolio basis, with gross margin expanding by 320 basis points and operating margin increasing by 200 basis points. The company noted particularly strong demand in AI and Cloud segments, where net sales surged 49%, now accounting for 8% of total group sales. During the quarter, Nokia also secured EUR 1 billion in orders from AI and cloud customers.
Network Infrastructure remained a key growth driver, with net sales rising 6%. Optical Networks stood out with 20% growth, supported by strong order intake and a book-to-bill ratio above one. IP Networks grew 3%, with expectations for improved performance in the coming quarters, while Fixed Networks declined 13% as the company continues its shift toward higher-margin products.
Nokia emphasized that demand for AI and cloud infrastructure has significantly outpaced earlier expectations. The company now projects the addressable AI and cloud market to grow at a 27% CAGR between 2025 and 2028, up from the previously estimated 16%, reflecting accelerating global investment across the supply chain.
At the Optical Fiber Communications (OFC) conference in March, Nokia introduced a new portfolio of innovations in Optical Networks designed for AI workloads, including four new Digital Signal Processors (DSPs) supporting 13 new solutions. These technologies are expected to reduce total cost of ownership by up to 70%, with sampling beginning in mid-2027 and volume production in the second half of the same year.
Mobile Infrastructure also delivered a stable performance, with net sales growing 3% and operating margin reaching 8.9%. Strength was driven by Core Software and steady Radio Networks performance, while Technology Standards benefited from new consumer electronics and multimedia agreements. Nokia also confirmed progress on AI-RAN development, with customer trials expected later this year and 10 customers now committed to collaboration.
For the full year 2026, Nokia now expects Network Infrastructure net sales growth of 12% to 14%, with Optical and IP Networks combined projected to grow 18% to 20%. The company also expects operating profit to exceed the midpoint of its EUR 2.0–2.5 billion guidance range.
Financially, Nokia reported comparable operating profit of EUR 281 million, up 54% year-on-year, while net profit rose 93% to EUR 295 million. Diluted earnings per share increased to EUR 0.05. The company also strengthened its balance sheet, with net cash and interest-bearing financial investments rising 27% to EUR 3.788 billion.
In addition, Nokia announced a dividend distribution of EUR 0.04 per share following board approval, as part of its broader shareholder return framework.
The company reiterated that its outlook is based on continued demand strength in AI-driven infrastructure markets, while also acknowledging risks related to supply chain constraints, macroeconomic volatility, geopolitical tensions, and competitive pressure across the telecom sector.
