Nokia beats profit estimates as AI data center demand surges

Nokia’s third-quarter profit came in ahead of analyst expectations. The reason was not phones, and not the cell towers people still picture when they hear the name. Instead, the Finnish company rode a wave of spending on data center networking gear, the plumbing that connects the servers behind the artificial intelligence boom. The numbers behind the beat Nokia reported net sales of €5.154 billion for the quarter. That is a 10% rise from a year earlier on a reported basis, or 9% once adjusted for comparability. The standout figure came from AI and cloud customers. Sales to that group climbed 123% year over year, which means the business more than doubled in twelve months. Orders from AI and cloud customers rose 118% to €1.5 billion during the quarter. Profitability improved alongside the top line. Nokia’s comparable operating profit margin reached 11.7%, an increase of 2.2 percentage points. The Network Infrastructure segment did much of the heavy lifting. Its sales grew 15% on a comparable basis, powered by a 43% jump in IP Networks and an 18% gain in Optical Networks. Guidance holds, and a few milestones CEO Justin Hotard kept the company’s full-year outlook unchanged. Nokia stil...