Nokia's Earnings Engine Outpaces Its AI Ambitions

Nokia's stock moved higher in pre-market trading, up 3.6%, as investors weighed a familiar question: whether the company's AI narrative can be converted into hard profit. The answer, based on its most recent quarterly report, is that the earnings story is already doing the heavy lifting — and that may matter more than any long-range market forecast.

Profit Growth Outruns Revenue

In its third-quarter 2026 results, published roughly three weeks ago, Nokia reported comparable net sales of EUR 5,154 million, a 10% increase year over year. What stands out is that earnings grew faster than the top line. Comparable operating profit reached EUR 605 million, up 35%, for a comparable operating margin of 11.7%.

That gap between revenue and profit growth is the metric worth watching. Growth becomes more valuable to shareholders when a disproportionate share of it reaches the operating line — and that same standard should apply to any AI-related opportunity the company pursues. Additional business should reinforce the profitability Nokia has already achieved, not dilute it.

For the full year 2026, Nokia reiterated its guidance for comparable operating profit of between EUR 2.1 billion and EUR 2.6 billion.

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A Traffic Forecast With a Number Attached

The longer-term demand case rests on the global network traffic report Nokia published on 4 November. The company projects that artificial intelligence will drive 44% of worldwide data traffic by 2035, with total traffic volume reaching almost 3,789 exabytes per month.

That is a demand forecast, not a business result. It strengthens the strategic case for high-capacity connectivity only if the expected traffic materialises and carriers respond with build-out decisions. The less glamorous point underlying the projection is simple: digital applications still need networks capable of carrying their traffic.

From Forecast to Footprint

A concrete anchor for that thesis arrived in early November, when Hotwire Communications selected Nokia to build an AI-ready network in North Carolina. Nokia expects the network to go into service in early 2027.

The Hotwire contract gives the long-term projection a nearer-term reference point. Rather than pricing the stock solely on the size of a future market, investors can track a named customer project and a scheduled launch.

Nokia is also exploring ways to extend its reach into optical connections inside data centres. According to media reports, the company examined supplying lasers and developing optical solutions close to — or jointly with — chips. Nokia manager Rob Shore said the company is evaluating its options. That openness makes sense as long as potential business areas are measured by their economic contribution: the question is where Nokia can earn attractive returns, and which technical approach fits.

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The Balance Sheet Gets a Second Look

Credit quality offers a separate lens. Moody's upgraded Nokia's long-term issuer rating and the rating on its senior unsecured obligations from Ba1 to Baa3, keeping a positive outlook. Where the traffic forecast addresses expected demand, the upgrade speaks to creditworthiness — and together the two paint a more constructive picture, provided network projects are executed on schedule.

Weighing it all, the order of priority is clear: earnings power first, execution second, and the long-term market opportunity after that. The operating improvement gives that framework a tangible starting point. The AI angle widens the opportunity set only if it produces business with convincing profitability — and the Hotwire build, due to come online in early 2027, is the next checkpoint against which to measure it.

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