Nokia: 3 Key Takeaways for Long-Term Investors
Key Points
Nokia grew third-quarter net sales 9% year over year.
AI and cloud net sales grew 123% year over year.
Operating margin expanded 220 basis points to 11.7%.
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On its Q3 2026 results call, held on Oct. 22, 2026, Nokia (NYSE:NOK) announced that net sales grew 9% year over year on a constant-currency basis.
Expanding demand for artificial intelligence infrastructure is driving operational leverage across its networking units. Strategic portfolio refinement and early delivery of cost synergies are supporting profitability. Three things management said stand out.
1. AI Infrastructure Drives Accelerating Growth Across Network Units
Demand for artificial intelligence connectivity is accelerating across data center networks and telecommunications customers. Management raised Nokia's 2027 combined sales growth expectations for Optical Networks and IP Networks (Internet Protocol networks) to 25%-30%.
In AI and cloud, net sales grew 123% year-over-year and represented 12% of total group net sales in the quarter.
-- Justin Hotard, President and Chief Executive Officer
2. Cost Synergies and Operating Leverage Are Expanding Operating Margins
Operating margin expanded 220 basis points year over year as higher revenue yielded groupwide operating leverage. Nokia is realizing synergies ahead of schedule from Infinera, an optical networking provider acquired to strengthen its scale.
The Infinera integration is largely complete, and we are on track to achieve the EUR 200 million synergy target by the end of this year, 1 year ahead of schedule.
-- Justin Hotard, President and Chief Executive Officer
3. Artificial Intelligence Radio Access Networks Transform Mobile Infrastructure
Transitioning radio networks to general-purpose computing platforms allows mobile operators to deploy software-defined artificial intelligence functions. Nokia's collaboration with technology partners is delivering measurable efficiency improvements during live commercial network tests.
In live environments, we've already demonstrated spectral efficiency gains of more than 20%, increasing capacity and improving network economics against our roadmap of 100% improvement in spectral efficiency gains in 2028.
-- Justin Hotard, President and Chief Executive Officer
Looking Ahead
Revenue growth is accelerating in target investment areas, and management is tracking above the midpoint of its full-year profit outlook. Market leadership in telecommunications, edge routing, and proprietary optical manufacturing gives Nokia a competitive advantage, while leadership monitors supply chain lead times and pricing discipline.
Overall, quarter 3 was a solid quarter, and we remain focused on both capturing growth and driving the operational rigor required to maximize the long-term value creation potential of the company.
-- Marco Wiren, Chief Financial Officer
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