Nokia delivered a solid performance in Q4 2025 with €6.1 billion in revenue, reflecting a 3% year-over-year growth, driven primarily by demand in AI and cloud infrastructure markets. However, its conservative 2026 guidance disappointed investors, causing a sharp 5.8% drop in stock value during early European trading.
Key Takeaways from Nokia’s Q4 2025 Earnings
CEO Justin Hotard’s strategic shift to focus on data center markets showed positive results as the Network Infrastructure division grew by an impressive 19%. This growth was largely fueled by increasing demand for AI infrastructure, with the Optical Networks subsegment growing by 17%, emphasizing its role in data center connectivity.
“Order intake was strong across Optical and IP Networks, with the book-to-bill ratio staying above one, reflecting steady demand from AI and cloud clients,” stated Hotard.
The comparable operating profit stood at €1.06 billion, slightly below last year’s €1.09 billion, leading to a margin reduction to 17.3%. Nokia attributed this decline to increased investments, including the integration of its latest acquisition, Infinera, a leader in optical networking.
Mobile Challenges and Market Shifts
While Network Infrastructure thrived, Mobile Networks faced a 1.7% revenue decline, particularly due to declining North American carrier spending. However, growth in regions like the Middle East, Japan, and Indonesia partially offset the losses. Notably, Mobile Networks’ gross margin improved from 37.3% to 40.1%, signaling stabilization amidst revenue pressures.
2026 Outlook and Future Potential
Nokia’s forecast for 2026 operating profit fell short of analyst expectations, guiding between €2.0–€2.5 billion, compared to the €2.37 billion consensus estimate. J.P. Morgan analysts predict “mid-single digit downgrades to consensus” as a result. The company does, however, anticipate 6-8% growth in Network Infrastructure, bolstered by AI and cloud demand.
Despite these challenges, Nokia remains committed to long-term investments, aiming to maintain technological leadership in AI-driven network solutions.
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