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Nokia Beats Profit Expectations as AI and Cloud Growth Power Optical Sales

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Nokia reported a stronger-than-expected third-quarter profit, lifted by booming demand for cloud infrastructure and AI-driven data center equipment following its acquisition of U.S. optical networking firm Infinera. Shares surged 10.6% to €5.20 — their highest level in over three years — adding €3 billion to the company’s market value.

Comparable operating profit reached €435 million ($507 million), well above analysts’ forecasts of €342 million, according to LSEG data. Group net sales rose 12% to €4.83 billion, supported by a 19% increase in optical network revenue on a constant currency basis. AI and cloud clients accounted for 6% of total sales and 14% of Nokia’s network infrastructure revenue.

CEO Justin Hotard said AI and data center demand “continues to accelerate,” underscoring the company’s growing focus beyond traditional mobile networks. Despite headwinds from U.S. tariffs, currency weakness, and losing a key AT&T 5G contract to Ericsson, Nokia upgraded its annual operating profit outlook to a range between €1.7 billion and €2.2 billion.

Lenovo Views U.S.-China Tariff Pause as Positive Amid AI Growth

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Chinese PC maker Lenovo (0992.HK) said Thursday that the recent tariff pause between the U.S. and China is a positive development and highlighted strong growth in China’s AI infrastructure despite ongoing tech tensions.

“The truce is a positive situation,” Lenovo CEO Yang Yuanqing told Reuters following the release of the company’s fiscal first-quarter results. “We feel better than the previous quarter — it brings more certainty rather than uncertainty.”

The U.S. and China have extended a tariff pause for another 90 days until November, avoiding triple-digit duties on each other’s goods and providing temporary relief to businesses.

Lenovo reported total revenue of $18.8 billion for the three months ending June 30, up 22% year-on-year and surpassing analysts’ forecast of $17.4 billion, according to LSEG data. Yang attributed the growth to strong AI demand across the company’s three main business segments, each of which achieved double-digit growth.

Despite a 30% U.S. levy on Chinese exports, including PCs, Lenovo’s CEO noted that the U.S. represents less than 20% of the company’s total revenue, and tariffs have so far had minimal impact thanks to Lenovo’s global manufacturing network. Net profit attributable to shareholders more than doubled year-on-year to $505 million, exceeding the consensus estimate of $307.7 million.

AI PCs represented over 30% of Lenovo’s PC shipments in the first quarter, while the AI server business surged 150% amid strong domestic demand. “We see a strong pipeline in AI servers,” Yang said.

China has recently advised major internet firms to be cautious when purchasing Nvidia H20 chips and to consider domestic alternatives, following the U.S. approval to resume H20 chip sales to China. Yang highlighted Lenovo’s investment in diversifying its supply chain and developing local component products to meet varied customer needs.

Lenovo shares dropped more than 3% in early trading Thursday, underperforming the Hang Seng Index, which rose 0.4%. However, the stock has gained 15% over the past three months, outpacing the benchmark.

Schneider Electric to Invest Over $700 Million in U.S. to Support AI Growth and Energy Infrastructure

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Schneider Electric announced on Tuesday plans to invest over $700 million in its U.S. operations over the next two years, focusing on strengthening energy infrastructure to support the AI boom, enhance domestic manufacturing, and improve energy security. The investment, slated to continue through 2027, comes amid ongoing tariff threats that could impact the French electrical equipment giant.

The U.S. government, under President Donald Trump, has imposed tariffs on a wide range of products, from aluminum and steel to pharmaceuticals and semiconductor chips. These tariffs have prompted many companies, including Eli Lilly and Apple, to boost their domestic manufacturing efforts. Schneider Electric aims to capitalize on this trend by expanding its facilities in Tennessee, Massachusetts, Texas, Missouri, Ohio, and North and South Carolina. The company also plans to create more than 1,000 new jobs as part of the investment.

In addition to the new $700 million, Schneider Electric has already committed $440 million since 2020 to enhance its U.S. supply chain. With these ongoing investments, the company’s total U.S. investment this decade is set to exceed $1 billion.

“We stand at an inflection point for the technology and industrial sectors in the U.S., driven by incredible AI growth and unprecedented energy demand,” said Aamir Paul, President of North America Operations for Schneider Electric.