Summary
- Nokia's AI and cloud customer sales increased 123%, with order intake up 118%.
- IP Networks and Optical Networks sales grew 43% and 18%, respectively, on a constant currency basis.
- Management expects further growth in 2027 but identifies component supply risks.
Nokia reported a 123% year-on-year increase in sales to AI and cloud customers during the third quarter of 2026, as demand for networking infrastructure continued to grow alongside investment in data centres and distributed computing.
Order intake from AI and cloud customers increased 118%, with Nokia securing €1.5 billion of new orders in the segment. Its Network Infrastructure business recorded 15% sales growth on a constant currency basis, led by increases of 43% in IP Networks and 18% in Optical Networks.
The figures were published on 22 October in Nokia’s results for the three months to 30 September. Group revenue reached €5.154 billion, up 10% on a reported basis, while comparable operating profit increased to €605 million.
The growth demonstrates the scale of investment reaching suppliers of the systems that connect computing resources. High performance AI installations depend on moving large quantities of data between processors, storage infrastructure and external networks, making connectivity a substantial element of overall system design.
Within large computing clusters, communication performance can influence how efficiently processors work together. Congestion, latency and insufficient bandwidth may limit the productivity of expensive computing hardware even where the servers have sufficient electrical power and cooling.
Optical networking provides high bandwidth connections over fibre, while IP networking equipment manages traffic across interconnected systems. Both functions are required in different parts of the infrastructure connecting data centres, cloud regions and customer networks.
As the scale of AI installations increases, operators must coordinate network design with computing hardware procurement. Port capacity, fibre routes, optical components and network resilience arrangements can influence the timing and cost of an installation.
Nokia’s order figures reflect demand for networking products and services. They should not be treated as a direct measurement of additional data centre megawatts, because purchases may support upgrades to operating facilities as well as entirely new infrastructure.
Some orders may also take time to become recognised revenue. The gap between a customer’s purchase commitment and delivery depends on production schedules, component availability and the timetable for the associated infrastructure.
Nokia has identified its partnership with Google as an example of demand for network equipment associated with major AI infrastructure investment. The company referred to its support for Google’s €13 billion investment programme in Finland, although it did not attribute the whole amount to Nokia equipment.
The European connection is commercially significant because many new facilities are being planned outside the continent’s established data centre clusters. Such projects require both local electrical infrastructure and reliable routes to other computing locations and customer markets.
Nokia expects its combined Optical and IP Networks businesses to grow between 25% and 30% in 2027. The forecast reflects management’s assessment of demand and its order pipeline rather than a guarantee of future revenue.
The company is also investing in production capacity and procurement to address constraints affecting parts of the semiconductor supply chain. Component shortages can limit the pace of network equipment delivery independently of demand from customers.
Reported group operating profit declined to €196 million during the quarter, compared with €252 million a year earlier, reflecting restructuring and integration costs. This contrasts with the increase in comparable operating profit and illustrates the financial costs accompanying Nokia’s reorganisation.
Nokia continues to integrate Infinera into its operations and expects the process to be completed by the end of 2026. The business combination broadens its optical networking activities during a period of increased demand for high capacity connectivity.
While the company’s financial results provide strong evidence of expanding network investment, the installation of equipment will remain dependent on production, deployment schedules and the availability of facilities ready to use that capacity.
