Nokia jumps after AI-driven Q3 beat

Shares of Nokia (NOK) are on the rise on Thursday after the company reported better-than-expected results for its third quarter. The beat was driven by higher demand from AI and data centers.  The Finnish communications equipment maker also raised its annual operating profit guidance for 2025. 

RESULTS: Nokia reported an adjusted operating profit of EUR 435M for Q3, which was better than the expected EUR 324.2M. Quarterly adjusted net sales grew 12% to EUR 4.83B, above the forecasted EUR 4.6B, helped by Optical Networks and cloud services.

The Finnish communications equipment maker said AI and cloud customers accounted for 6% of group net sales and 14% of network infrastructure sales, with optical networks up 19% on a constant currency basis. Of note, the company has recently acquired the U.S. optical networking company Infinera. Mobile networks remain Nokia’s core business. “AI and data center demand continues to be robust. In fact, it continues to accelerate from our perspective,” CEO Justin Hotard said.

Nokia expects annual operating profit between EUR 1.7B- EUR 2.2B, a slight increase from the previous range of up to EUR 2.1B. The Finnish company had previously said the second half of 2025 would be stronger than the first.

POSITIVE SURPRISE: Raymond James raised the firm’s price target on Nokia to $6.50 from $5 and kept an Outperform rating on the shares following the company’s Q3 report, in which it beat expectations. Cloud and Network Service strength “contributed a positive surprise,” says the firm, which adds that strength with cloud providers supports its Outperform thesis. Investors may have lost patience waiting for operators to migrate the 5G core, but the trend appears to be taking hold, Raymond James adds.

PRICE ACTION: Shares of Nokia are up almost 10% on Thursday, trading at $6.08 in New York.