Nokia’s third-quarter profits rose sharply as demand from artificial intelligence (AI) and cloud service companies boosted sales and orders, strengthening the Finnish networking technology company’s position in the growing AI infrastructure market.
The company reported net sales of 5.2 billion euros for the third quarter, a 9 percent increase compared with the same period last year. Comparable operating profit for July to September rose by 35 percent year-on-year to 605 million euros.
Nokia attributed the stronger results largely to growing demand from AI and cloud service customers, a segment that has become an increasingly important source of business for the company. Sales to these customers more than doubled, rising by 123 percent, while orders increased by 118 percent to 1.5 billion euros compared with the previous year.
The results point to the growing role of network infrastructure in supporting AI development. As companies expand their use of AI and cloud computing, they need reliable, high-capacity connections to move data between computing facilities, data centres and other parts of their networks. Nokia supplies networking technology designed to support this connectivity.
Nokia said its expertise in optical and IP networking puts it in a strong position to meet the needs of AI infrastructure that is becoming larger, more distributed and more interconnected. The company also highlighted its partnership with Google as an example of how its technology can support large-scale investment in digital infrastructure.
“Our strengths are uniquely suited to meet growing demands for AI infrastructure that is larger, more distributed and hyperconnected. We are investing where we can differentiate and co-innovate with hyperscalers,” Nokia President and CEO Justin Hotard said in the company’s third-quarter earnings release.
Hotard also pointed to Google’s planned investment of 13 billion euros in Finland, saying Nokia’s optical and IP networks provide the connectivity required to support AI infrastructure. The partnership illustrates how Nokia’s networking business can benefit from investment in the computing and data systems needed to develop and operate AI services.
“Overall, growth is accelerating, operating leverage is becoming more visible and I’m confident in the long-term shareholder value Team Nokia is creating,” Hotard said.
The increase in operating profit outpaced sales growth, indicating that Nokia’s comparable profitability improved faster than its revenue during the quarter. The company’s latest figures also highlight the commercial importance of AI and cloud customers, whose rising spending is creating new demand for the networking systems that connect increasingly complex digital infrastructure.
