Finnish telecoms equipment maker Nokia has reported a 9% increase in second-quarter net sales, beating market expectations as demand for artificial intelligence and cloud computing infrastructure boosted orders for its networking hardware. The company said revenue reached €5.3bn (£4.5bn) for the three months to June, with particular strength in its Network Infrastructure and Cloud and Network Services divisions.
The results come as telecom operators and hyperscale data centre operators ramp up spending on high-capacity optical networks and routing equipment to handle the explosion in AI workloads. Nokia’s CEO Pekka Lundmark said the company was benefiting from 'a structural shift' in network investment, with customers prioritising low-latency, high-bandwidth systems essential for AI model training and inference.
On the London Stock Exchange, Nokia’s ADR-listed shares rose 2.3% in early trading, while the FTSE 100 edged up 0.4% to 8,215 points. Tech-heavy peers such as Arm Holdings and Sage Group also gained, reflecting a broader confidence in the AI supply chain. The FTSE 250, which includes several UK-listed telecom and network services firms, added 0.6%.
Analysts at Berenberg noted that Nokia’s performance signals a potential recovery in telecom capital expenditure after a sluggish 2024-25 period. 'We are seeing the early stages of a capex cycle driven by AI, and Nokia is well positioned with its optical and IP routing portfolios,' the broker said in a note. However, they cautioned that the recovery remains uneven, with some European operators still cautious on spending.
For UK investors and pension holders with exposure to global technology equities, the results reinforce the thesis that AI infrastructure spending is broadening beyond chipmakers. The shift could benefit UK-based data centre operators and fibre network providers, though valuations in the sector remain elevated.