Nokia (NOK) Stock: Jumps 10% on Strong Q3 Earnings and Expansion Plans in AI, Defense

TLDRs:

• Nokia’s Q3 2025 profit beats expectations, boosting shares over 10% in early trading.
• Optical networks and AI-focused cloud demand drive Nokia’s strong quarterly performance.
• Expansion into AI and defense sectors positions Nokia for future growth and diversification.
• Annual operating profit guidance slightly upgraded despite prior tariff and currency challenges.

Nokia (NOK) stunned investors on Thursday as its third-quarter earnings surpassed analyst expectations, sparking a more than 10% jump in its stock price on the NYSE.

The Finnish telecom giant reported an adjusted operating profit of €435 million (US$505 million), well above the €324 million forecasted by market analysts.

This performance was largely fueled by robust demand in its network infrastructure and optical networks divisions. Strong interest in AI-enabled cloud services, bolstered by Nokia’s recent acquisition of U.S.-based Infinera, further contributed to the earnings upside.

Optical Networks Drive Growth

Quarterly group net sales climbed 12% to €4.83 billion, exceeding the forecasted €4.6 billion. Optical Networks led the way with a 19% growth on a constant currency basis, reflecting the increasing appetite for high-capacity data infrastructure.

Nokia also saw AI and cloud-related sales account for approximately 6% of overall group net revenue, highlighting the company’s pivot toward emerging technologies.

Market Response and Share Performance

Investors responded enthusiastically to the earnings report. Nokia’s shares jumped over 10% to $6.11 by 11:02 AM EDT on Thursday, marking the stock’s highest level in more than three years.

In Europe, shares rose 8% to €5.2 in early trading. The surge added roughly $3.5 billion to Nokia’s $34 billion market value.

The company had faced headwinds earlier this year, including U.S. tariffs, a weaker dollar, and a slowdown in the North American telecom market. Nokia lost some ground as U.S. carrier AT&T phased out its 5G contract in favor of Ericsson, which secured a $14 billion deal in 2023. Despite this, Nokia’s diversified portfolio in optical networks and AI cloud services helped offset domestic challenges.

Expansion into AI and Defense

Looking ahead, Nokia is positioning itself strategically in AI and defense to diversify revenue streams beyond mobile networks. The acquisition of Infinera strengthens its capabilities in optical networking and AI-driven data center solutions.

The company slightly raised its annual operating profit guidance to a range of €1.7 billion to €2.2 billion, up from its previous €1.6 billion to €2.1 billion forecast. This revision follows a change in reporting for venture fund results and the decision to scale down passive investments.

Analysts view Nokia’s performance as a clear signal that its investment in emerging technologies is paying off. The focus on AI, cloud, and defense sectors not only offsets the challenges in traditional telecom markets but also positions the company for sustainable long-term growth.

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