Nokia reported 281 million euros in adjusted operating profit for the first quarter of 2026, topping analyst expectations of 244 million euros by about 15%. The result adds weight to the company’s effort to move away from sluggish legacy mobile network equipment and build new demand around AI data center connectivity.
First full quarter after the business overhaul
The quarter was not massive in absolute terms, but it came in ahead of consensus and gave investors an early reading on Nokia’s new structure. Bloomberg said the company’s share price has nearly doubled over the past year, with much of that move tied less to a single earnings print and more to expectations around an AI infrastructure transition.
Nokia reorganized its operations late last year into two main units. Network Infrastructure is focused on connectivity gear for AI data centers, while Mobile Infrastructure houses the traditional mobile network equipment business. Other non-core assets were grouped into a portfolio business, and defense operations were separated out. The message is clear: future growth is being tied to data center connectivity, while the older businesses are managed alongside it.
AI and cloud customers were the main source of growth
CEO Justin Hotard said Nokia remains within its full-year adjusted operating profit guidance of 2 billion to 2.5 billion euros. On the earnings call, he pointed specifically to AI and cloud customers as the key growth drivers in the quarter, not the company’s legacy mobile equipment operations.
There was still a mixed signal inside the report. The article noted that sales in the Network Infrastructure division came in slightly below expectations, a sign that AI-linked data center connectivity is growing but has not yet reached large scale in the near term. A profit beat and a fully proven transformation are not the same thing.
Nvidia deal targets AI-enabled wireless networks
A major part of the market narrative around Nokia has been its relationship with Nvidia. According to the report, Nvidia invested $1 billion in Nokia last year and will supply AI computing equipment to support AI upgrades in wireless networks. Customer trials are expected to begin later in 2026, and 10 customers have already confirmed participation.
The partnership is aimed at pushing AI inference closer to the network edge rather than keeping all compute demand inside centralized cloud facilities. Nokia is trying to combine its wireless infrastructure base with Nvidia’s computing stack to test whether telecom equipment can become part of the next AI buildout. The next question is whether that cooperation can produce recurring customer revenue instead of staying an attractive market story.
Contrast with Ericsson sharpens the picture
The report also pointed to a weaker update from Ericsson, Nokia’s main European rival. Ericsson’s latest earnings fell short of analyst estimates, and the company warned that surging chip demand is raising costs.
That contrast matters. Both companies operate in the same regional telecom equipment market, yet this quarter showed a split in execution and strategic focus. Nokia’s earlier push into AI infrastructure connectivity is starting to show up in earnings expectations, while Ericsson is still dealing with chip-cost pressure in its traditional business lines. Nokia’s transition is still in its opening stage, but this quarter gave it an early win.