Nokia Stock Rises as AI Orders Boost 2026 Profit Outlook

Nokia shares traded higher on August 28, 2026, as the company reported a surge in AI and cloud-related orders that prompted an upward revision to its full-year profit forecast. The move signals a shift in investor sentiment, as the telecom equipment provider pivots its business model toward the infrastructure required to support high-performance computing and data-intensive AI workloads [1].

Growth in AI infrastructure

Nokia’s second-quarter results for 2026 showed a 12% year-on-year increase in its Network Infrastructure segment, which serves as the primary engine for its AI and cloud expansion [1]. The company reported that sales to AI and cloud customers more than doubled compared to the same period in the prior year, a trend management attributes to the growing demand for GPU cluster connectivity and low-latency edge nodes [1]. This growth helped drive a total quarterly operating profit of EUR 434 million, an 18% increase over the prior-year quarter [1].

The company’s ability to secure EUR 2.8 billion in new AI and cloud-related orders provides a clearer outlook for near-term revenue, with roughly half of that volume expected to be realized within the next year [1]. This order momentum supported management’s decision to raise the 2026 profit guidance to a range of EUR 2.1 billion to EUR 2.6 billion, a target that exceeds the previous outlook [1]. While the company continues to navigate broader market volatility—including concerns regarding the return on investment for AI spending across the tech sector—Nokia’s performance indicates that its specific role in providing the physical backbone for AI is gaining traction [1, 2].

Operational shifts and market context

The recent stock performance reflects a broader recovery for the company, which has seen its shares rise 61.06% since the beginning of 2026 [1]. This growth outpaces many traditional telecom benchmarks, suggesting that investors are increasingly pricing in the company’s transition from legacy mobile networking toward high-capacity, AI-ready infrastructure [1].

To maintain its technical edge, Nokia continues to utilize equity-based compensation to retain specialized staff, recently transferring 3,635,260 treasury shares to satisfy incentive plan obligations [1]. While this move marginally increases the free float, the impact on the overall ownership structure remains minimal [1]. The company’s focus remains on proving that it can sustain these margins as it scales its AI-related project pipeline, differentiating itself from competitors who are also vying for dominance in the 6G and data-center connectivity markets [1, 2].

What to watch

• Revenue Conversion: Monitor the speed at which the EUR 2.8 billion AI and cloud order backlog is converted into realized revenue over the coming quarters [1].
• Profitability Targets: Track whether operating profit growth continues to outpace revenue growth as the company executes against its updated EUR 2.1 billion to EUR 2.6 billion profit forecast [1].
• Market Sensitivity: Observe how Nokia’s stock reacts to broader fluctuations in AI-sector spending, particularly as investors weigh the capital expenditure of major cloud providers against the actual returns on AI infrastructure [2].

The central question for the remainder of the year is whether Nokia can maintain its current growth trajectory in the Network Infrastructure segment while keeping costs disciplined. If the company successfully converts its AI order book into recurring revenue, it may further decouple its valuation from the broader, more volatile telecom equipment market.