Nokia Q3 Profit Beats Expectations by Wide Margin, AI Data Center Orders Surge 118% YoY
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Nokia posted Q3 comparable operating profit of €605 million, beating consensus by over a third, as AI and cloud orders doubled year-on-year to €1.5 billion — the legacy telecom-equipment maker is shifting its growth engine from 5G base stations to data centers.
How big was the earnings beat?
Comparable operating profit hit €605 million versus analyst expectations of roughly €453 million — a 33% overshoot. This means → not a marginal beat, but a major positive surprise.
Comparable net sales rose 10% year-on-year to €5.15 billion, also above consensus of €5.05 billion.
Nokia kept its full-year guidance unchanged. In plain terms = management sees this as on-trend, not a one-off spike, so it did not raise its outlook.
AI orders doubled — where did the money come from?
AI and cloud orders reached €1.5 billion in the quarter, up 118% year-on-year — the company's strongest growth segment by far.
Part of the jump came from concentrated delivery of backlogged data-center orders. This means → not all of it is fresh demand; some was previously queued orders recognized as revenue this quarter.
CEO Justin Hotard made data-center networking equipment a core priority after taking over and last year launched a strategic pivot toward AI infrastructure. This reflects Nokia actively moving its bets from legacy telecom to AI.
What is happening to the legacy telecom business?
The 5G network buildout slowdown has been a persistent drag — global carriers' capex on 5G has plateaued, and equipment orders are naturally shrinking.
In plain terms = the massive wave of 5G construction has crested; selling base stations is getting harder, which is why Nokia is pivoting to data centers.
Nokia is also partnering with Nvidia to develop mobile-network equipment using Nvidia's advanced chips, replacing traditional telecom-specific processors. This means → Hotard wants to extend AI computing power from data centers into telecom networks, creating a broader business loop.
Are there supply-chain risks lurking?
Rapid AI-infrastructure expansion is straining supply chains: memory chips — key components that store data inside data-center servers — are in tight supply, and prices are rising.
Rival Ericsson said it has mitigated the impact by having customers pre-order components. This reflects an industry-wide scramble for the same parts; the supply-demand mismatch will not resolve quickly.
The stock is up nearly 50% this year — is there room left?
Nokia shares have gained roughly 48%–50% year-to-date, closing Wednesday at €8.23.
Hotard expects combined optical- and IP-networking revenue to grow 25%–30% by 2027; the company has previously said its strategic shift will support double-digit operating-profit growth for several years ahead.
The key test: whether data-center orders can sustain their volume in coming quarters. In plain terms = this quarter's numbers look strong, but they include a backlog catch-up; the next step is whether new orders can keep pace.
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