Nokia Q1 2026: Optical Networks Drive 20% Growth Amid AI Boom

Event summary

  • Q1 net sales up 4% y-o-y, with Optical Networks growing 20% and AI & Cloud customers up 49%.
  • Gross margin expanded 320bps y-o-y to 45.5%, operating margin up 200bps to 6.2%.
  • Full-year outlook unchanged, but Network Infrastructure sales now expected to grow 12-14%.
  • EUR 1 billion in orders from AI & Cloud customers booked in Q1.
  • New Optical Networks innovations announced, with sampling starting mid-2027.

The big picture

Nokia's Q1 2026 results highlight the accelerating demand for AI-driven infrastructure, with Optical Networks and AI & Cloud segments leading growth. The company's strategic shift to higher-margin products and investments in manufacturing capacity reflect broader industry trends toward AI workloads and data center expansion. Nokia's ability to capitalize on these trends will depend on its execution in scaling production and maintaining margin expansion amid competitive pressures.

What we're watching

AI Demand Acceleration
Whether Nokia can sustain 49% growth in AI & Cloud segment amid supply chain constraints.
Optical Networks Investment
The pace at which Nokia's investments in Optical Networks will translate into full-year profitability.
Execution Risk
How Nokia's integration of new segments and product launches will impact operational efficiency.