Nokia surges 11% after Q3 beat driven by AI, data center demand

Investing.com-- Nokia Oyj (HE:NOKIA) (ST:NOKIA)shares jumped more than 11% on Thursday after the Finnish communications equipment maker posted stronger-than-expected third-quarter results, driven by higher demand from the artificial intelligence and data center sectors.

The company reported an adjusted operating profit of €435 million ($504.5 million) for the quarter ended September, topping Bloomberg estimates of €324.2 million, though down about 10% from a year earlier. 

Adjusted net sales grew 12% to €4.83 billion, above Investing.com forecasts of around €4.6 billion. 

The increase was led by Optical Networks, where sales climbed 19% year over year on a constant-currency basis, lifting overall Network Infrastructure revenue 11%, according to Jefferies Equity Research.

Comparable gross margin reached 44.2%, exceeding Jefferies’ 43.4% forecast, while the comparable operating margin came in at 9%, above the 7.4% consensus estimate. 

Diluted earnings per share were €0.06, matching both Jefferies’ and market expectations. Order intake in Optical and IP Networks remained strong, with a book-to-bill ratio above one.

Across its divisions, Network Infrastructure sales totaled €1.95 billion, up 28% from a year earlier. Cloud and Network Services rose 8% to €645 million, and Mobile Networks revenue increased 4% to €1.84 billion. 

Nokia Technologies, its patent licensing unit, reported an 11% gain to €391 million. Chief Executive Justin Hotard said optical network demand from AI and data center customers contributed most to the sales increase.

The company raised its full-year 2025 comparable operating profit guidance to between €1.7 billion and €2.2 billion, from €1.6 billion to €2.1 billion previously, citing a technical change in how it records venture fund investment gains and losses. Nokia said it remains on track to reach the midpoint of that range.

Margins weakened slightly despite higher sales, as currency movements, including a stronger euro and a softer U.S. dollar, weighed on overseas earnings.

Jefferies maintained a “hold” rating on the stock with a price target of €4.50, about 5% below Wednesday’s close of €4.73. 

The brokerage noted that Nokia’s performance reflected continued strength in network infrastructure tied to AI-related investments.