Nokia (NOK) Stock: AI Boom Fuels 11% Rally After Earnings Beat

TLDR

• Nokia stock jumped 11% after beating Q3 earnings expectations with adjusted operating profit of €435 million versus estimates of €324.2 million
• Revenue grew 12% to €4.83 billion, driven by a 19% surge in Optical Networks sales tied to AI and data center demand
• Gross margin reached 44.2% and operating margin hit 9%, both exceeding analyst forecasts
• The company raised its full-year 2025 operating profit guidance to €1.7-€2.2 billion from €1.6-€2.1 billion
• Network Infrastructure division led growth with sales up 28% to €1.95 billion, while Mobile Networks and Nokia Technologies also posted gains

Nokia shares surged over 11% on Thursday after the company delivered third-quarter results that topped Wall Street estimates. The Finnish telecom equipment maker posted adjusted operating profit of €435 million for the quarter ended September.

Nokia Oyj, NOK

Analysts had expected just €324.2 million. The actual profit figure came in about 10% lower than the same period last year.

Revenue grew 12% to €4.83 billion. This beat forecasts of around €4.6 billion.

The Optical Networks division drove most of the upside performance. Sales in that segment jumped 19% year over year on a constant-currency basis.

Chief Executive Justin Hotard pointed to optical network demand from AI and data center customers as the main growth driver. These customers are building out infrastructure to support AI workloads and data processing needs.

The Network Infrastructure division benefited from the optical strength. Overall revenue in that segment climbed 11%.

Margins and Profitability Metrics

Gross margin reached 44.2% for the quarter. Jefferies had forecast 43.4%.

Operating margin came in at 9%. The consensus estimate was 7.4%.

Diluted earnings per share landed at €0.06. This matched both Jefferies’ projection and broader market expectations.

Order intake remained healthy across Optical and IP Networks. The book-to-bill ratio stayed above one, indicating more orders coming in than products shipped out.

Network Infrastructure sales totaled €1.95 billion. That represents a 28% increase from the prior year.

Cloud and Network Services revenue rose 8% to €645 million. Mobile Networks brought in €1.84 billion, up 4% year over year.

Business Unit Performance

Nokia Technologies, the company’s patent licensing arm, reported revenue of €391 million. This marked an 11% gain from the same quarter last year.

For the nine-month period ending September 30, Nokia reported sales of €13.764 billion compared to €13.236 billion in the prior year period. Net income fell to €109 million from €457 million a year earlier.

Basic and diluted earnings per share from continuing operations were €0.02 for the nine months. This compared to €0.17 per share in the same period of 2024.

Currency headwinds affected margins despite the sales growth. A stronger euro and weaker U.S. dollar reduced the value of overseas earnings when converted back to euros.

Nokia raised its full-year 2025 comparable operating profit guidance. The new range is €1.7 billion to €2.2 billion, up from €1.6 billion to €2.1 billion.

The company attributed the guidance increase to a technical change in how it records venture fund investment gains and losses. Management said Nokia remains on track to hit the midpoint of the updated range.

Jefferies maintained a “hold” rating on the stock with a €4.50 price target. This sits about 5% below the €4.73 closing price from Wednesday.

The brokerage noted that Nokia’s results reflected continued strength in network infrastructure tied to AI-related investments. The book-to-bill ratio above one in key segments suggests demand momentum could continue into the fourth quarter.

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