STOCKHOLM: Nokia posted a better-than-expected second-quarter performance in 2026, with an 18% rise in comparable operating income to 434 million euros, compared to an estimated 382 million euros from analysts in LSEG. The Q2 2026 AI Demand profit result from Nokia shows that the Finnish telecommunications equipment company has already seen financial success from its new strategy of fiber optic technology for AI data centers.

Comparable net sales were 4.82 billion euros, which was also higher than expectations, while AI and Cloud customer net sales more than doubled in the quarter to 446 million euros. The firm reported 2.8 billion euros in bookings in the quarter, an advance signal that indicates the path of demand is getting stronger and not leveling off.

The Nokia Data Centre Pivot Has Paid Off

The fact that the Nokia Q2 2026 profit from AI demand surpassed expectations is a result of a business pivot strategy that Nokia has been undertaking in the last couple of years, involving a move towards fibre optic cables and networking infrastructure sales to the hyperscalers constructing AI data centres on a massive scale.

With companies like Microsoft, Google, Meta, and Amazon competing to build the infrastructure required for the development of AI, there is a large demand for high-speed fibre optic cable connections not only in data centres but also connecting the various data centres together.

"Demands are robust, while supply remains the key issue in the industry, which drives our customers to book orders on a longer-term basis."
Justin Hotard, CEO, Nokia

It is quite important for Nokia's visibility as regards its earnings because when the customers are booking orders on a longer-term basis, this means that they are confident about their own capital spending plans and that they are securing supply from equipment suppliers, who have limited delivery capacity – something that gives Nokia better visibility than other spot-order companies.

ALSO READ: IT Ministry Denies Telecom Bill Allows Private Land Acquisition After Social Media Backlash

Memory Chip Threat To Nokia – Not Impervious

There are certain supply chain risks related to the Nokia Q2 2026 profit AI demand beat that are pointed out by the CEO of Nokia himself, and this is what makes this particular profit beat different from an unambiguously good story for the company.

The companies producing AI are currently using so many memory chips that the prices for semiconductors around the world are increasing and affecting not only producers of AI chips, but Nokia itself that uses memory chips in its networking equipment.

However, competitor Ericsson had previously warned a few days back that the increase in the cost of memory chips, due to growing demand for AI, is hurting its margins, and this caused the company’s stock price to fall, making investors anxious about the cost structure of the whole telecom equipment industry.

AI Revenue Doubling - Structural Shift, Not Quarterly Fluke

The Nokia Q2 2026 profit AI demand AI and Cloud revenue increase from 2019’s €223 million to €446 million for Q2 2026 highlights more than just a good quarter. Rather, it shows the structural shift that more is being invested globally in AI infrastructure, which is becoming more rather than less resource-intensive as AI models become increasingly complex.

The positioning by Nokia for fibre optics connection and data centre networking allows the company to be directly impacted by this structural change without having to compete against other companies such as Nvidia in the GPU and semiconductor markets. The connection of the data centres is the less glamorous but equally important part of implementing AI and is what Nokia is becoming increasingly involved in.