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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.

Ericsson’s shares surge 13% after profit beat and minimal tariff concerns

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Swedish telecoms giant Ericsson saw its shares soar more than 13% on Tuesday, marking its strongest single-day rise since 2018, after the company reported better-than-expected quarterly earnings and dismissed concerns over U.S. tariffs.

Adjusted EBIT (earnings before interest and taxes) — excluding restructuring costs — reached 15.4 billion Swedish crowns ($1.62 billion) for the quarter ending September, exceeding analysts’ forecasts of 14.1 billion crowns, according to an Infront poll.

The company attributed its strong performance to ongoing cost savings and its leading market share in North America, where it has outpaced rival Nokia in the race to deploy 5G infrastructure. Ericsson’s finance chief Lars Sandström told Reuters that while no firm is entirely immune to tariffs, the company currently sees “no additional impact going forward.”

Although total net sales fell 9% year-on-year to 56.2 billion crowns, they still surpassed expectations of 55.7 billion. Sales in the Americas declined 8% compared to 2024’s strong performance, which benefited from major customer investments and network deliveries.

Ericsson also announced a new five-year partnership with Vodafone to modernize programmable networks and confirmed the completion of its Iconectiv sale, generating a one-off profit of 7.6 billion crowns — potentially paving the way for higher dividends or a share buyback program.

Ericsson and Nokia secure $2.7B 5G deal with VodafoneThree in UK

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VodafoneThree, the newly merged entity of Vodafone and CK Hutchison, has awarded a £2 billion ($2.7 billion) contract to Ericsson and Nokia to supply 5G equipment into the next decade, the companies announced on Monday.

Key details of the deal:

  • Ericsson: Named the primary vendor, its contract is valued at 12.5 billion Swedish crowns ($1.3 billion). Ericsson will supply advanced 5G radio products, AI-powered and energy-optimized hardware, plus smart antennas to deliver faster speeds in London, Edinburgh, Cardiff, and Belfast.

  • Nokia: Returns as a UK supplier for Vodafone and Three, providing radio access network (RAN) and core network equipment to around 7,000 sites. The company did not disclose the financial details of its share.

  • VodafoneThree strategy: Following the merger in June, the company pledged a £11 billion ($14.8 billion) investment over 10 years to create one of Europe’s most advanced 5G networks.

Market significance:

  • The deal is a major win for Ericsson and Nokia, two Nordic rivals that have been under pressure from a global telecom slowdown and U.S. tariffs.

  • It underscores Europe’s push for 5G self-reliance, as Ericsson and Nokia step up against rivals like Huawei, which faces restrictions across several European markets.

  • VodafoneThree aims to strengthen its competitive edge in the UK by offering enhanced 5G speeds and coverage, improving customer experiences in major cities.

This long-term supply partnership reinforces Ericsson and Nokia’s positions as critical players in Europe’s 5G rollout, while also giving VodafoneThree the infrastructure to challenge rivals BT/EE and Virgin Media O2.