Nokia Corporation Q2 2026 Earnings Recap

Shares fell 10.3% following a cautious outlook and signs of decelerating revenue conversion despite strong order intake in AI and cloud. Investor concern appears driven by the lumpy nature of order patterns and uncertainty around near-term revenue realization.

Key Takeaways

• Net sales grew 9% in Q2, with gross margin expansion of 70 basis points to 46% and operating margin improving by 70 basis points to 9%.
• AI and cloud segment orders surged to EUR 2.8 billion, more than doubling year-on-year, but only about half of this order volume is expected to convert to revenue within 12 months, highlighting potential near-term revenue volatility.
• Network infrastructure showed growth led by optical and IP networks, with stable profitability in mobile infrastructure driven by product mix.
• Nokia emphasized significant investments in indium phosphide manufacturing capacity to support optical growth ambitions, including facility expansion and acquisition in the U.S. to address supply constraints.
• The launch of the commercial AI RAN platform, expected commercially in 2027, signals a strategic shift but remains early-stage with deployments targeted for year-end pilots.