Nokia Vaults Higher On Proof of Growth In AI Infrastructure

Core Insights - Nokia is diversifying from telecom infrastructure and has reported a 9% overall revenue growth, with significant gains in AI infrastructure and datacenter networking [2][3][4] - The company’s stock surged 10% following the positive earnings report, driven by strong demand in optical and cloud services [3][5] - Nokia's management indicated that AI and cloud customers now account for 6% of total net sales and 14% of network infrastructure sales, with optical networks growing by 19% [4][5] Financial Performance - Nokia's network infrastructure revenue grew by 11% year-over-year, reaching €1.95 billion ($2.26 billion) [5] - Cloud and Network Services exceeded expectations with sales of €645 million ($750 million), 17% above estimates [5][7] - The company expects annual operating profit to be between €1.7 billion and €2.2 billion, slightly upgraded from the previous range [5] Strategic Direction - The turnaround strategy initiated by former CEO Pekka Lundmark is showing positive results, moving away from reliance on telecom [4][6] - The acquisition of Infinera for $2.3 billion is a key part of Nokia's strategy to enhance its optical networking capabilities [4][6] - New CEO Justin Hotard is expected to continue this strategic focus, leveraging his background in datacenter and enterprise [10][11] Market Positioning - Nokia is positioning itself as a major supplier of networking infrastructure for data centers and AI, with a focus on high-performance products [11][15] - The company has established partnerships with significant players in the AI infrastructure space, including CoreWeave, Meta, and Google [12][13][14] - Analysts have raised their price targets for Nokia shares, reflecting increased confidence in its growth potential [13]