en.Wedoany.com Reported - Nokia, the Finnish telecommunications equipment manufacturer, had a solid start to the first quarter of 2026, driven by strong demand in key areas such as optical networks and AI infrastructure. The report shows that the company's comparable net sales reached €4.5 billion, up 4% year-on-year, with the gross margin climbing to 45.5% and the operating profit margin increasing to 6.2%. Notably, AI and cloud business revenue surged 49% to €350 million, with new orders in the quarter reaching €1 billion, indicating continued strong demand from hyperscale cloud providers and data centers.
As the company's core growth segment, network infrastructure revenue increased by 6% year-on-year to €1.83 billion. Optical network performance was particularly outstanding, with revenue jumping 20% to €821 million, primarily driven by strong orders from AI and cloud customers for Data Center Interconnect (DCI) systems, pluggable optical modules, and line systems. IP network revenue grew by 3%, benefiting from AI-driven demand for data center switching and routing; fixed network revenue declined by 13% due to the transition to fiber and infrastructure products. Nokia views the accelerating demand for optical networks and AI infrastructure as key growth engines.
Nokia continues to intensify its efforts in product innovation, launching four new digital signal processors (DSPs) at OFC and driving 13 solutions aimed at AI-scale networks, claiming it can reduce total cost of ownership by 70%. To meet growing market demand, the company is increasing investment in optical network manufacturing capacity, including its Indium Phosphide fab in San Jose. Looking ahead to the full year, Nokia expects network infrastructure revenue to grow by 12%-14%, with the combined growth of optical and IP networks amounting to 18%-20%, reflecting the strong prospects driven by the AI infrastructure cycle.
"We achieved a solid start, with first-quarter net sales growing 4%, gross margin expanding by 320 basis points, and operating margin expanding by 200 basis points. Demand remains strong, particularly in artificial intelligence and cloud," Nokia management stated. Industry analysts believe that AI infrastructure demand is prompting telecom equipment makers to accelerate their expansion into data centers and AI networking to adapt to changes in operator spending cycles.
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