AI transformation is starting to bear fruit! Nokia Oyj Sponsored ADR(NOK.US) Q1 profit exceeds expectations, with a 56% year-on-year increase in sales of optical networking business.

Nokia Oyj Sponsored ADR (NOK.US) announced better-than-expected first-quarter earnings performance, indicating that its transformation towards artificial intelligence (AI) and cloud infrastructure is starting to pay off. Data shows that Nokia's first-quarter net sales increased by 3% year-over-year to 4.5 billion euros, slightly below analysts' average expectations of 4.6 billion euros. In terms of profit, adjusted operating profit for the quarter was 281 million euros, an increase of 54% year-over-year, surpassing analysts' average expectation of 244 million euros; quarterly profit was 295 million euros, skyrocketing by 93%; adjusted earnings per share were 0.05 euros, a 67% increase from the previous year. Nokia Oyj Sponsored ADR streamlined its business in the fourth quarter of last year, focusing on the data center interconnect area and betting that the global AI spending trend will drive its sales growth. The first quarter financial report is the first report released by Nokia Oyj Sponsored ADR under its new business structure. Data shows that the network infrastructure division covering AI data center connectivity business saw a 12% year-over-year sales increase to 1.829 billion euros in the first quarter; within that, the optical network business saw a 56% year-over-year sales increase to 821 million euros. The mobile infrastructure division covering traditional mobile device business saw a 3% year-over-year sales decrease to 2.495 billion euros. Nokia Oyj Sponsored ADR CEO Justin Hotead stated that the company had a "good start to the year." The company expects full-year adjusted operating profits to be between 2 billion and 2.5 billion euros in 2026. Hotead mentioned that although the mobile infrastructure division still contributes to the majority of sales, the main source of growth is AI and cloud customers. Nokia Oyj Sponsored ADR's comeback is based on catching the wave of the optical communication industry. As humanity moves towards the AI era, with higher demands on data transmission rates, capacity, and stability for AI large models, autonomous driving, and embodied intelligence, traditional telecom signal transmission methods have reached their physical limits. Optical communication, using light signals to transmit information, provides high bandwidth, low latency transmission, and can reduce energy consumption in long-distance, high-capacity transmission, becoming the "highway" for delivering AI computing power. The once dominant giant in the mobile phone market is now making a comeback as a leader in communication and AI infrastructure. Nokia Oyj Sponsored ADR has transformed into the world's second-largest telecom equipment provider, holding a significant position in 5G patents, optical communication, and computational network areas. The company holds a large number of core 5G patents; its optical communication equipment market share ranks among the top globally and provides network infrastructure to over 130 countries globally, with most mainstream North American cloud service providers adopting its optical transmission solutions. Nokia Oyj Sponsored ADR completed its transformation towards AI and cloud infrastructure through a series of acquisitions. In 2016, Nokia Oyj Sponsored ADR acquired Alcatel-Lucent for 15.6 billion euros, gaining access to core patents from Bell Labs and becoming the world's second-largest optical network equipment supplier; in 2024, it acquired optical network equipment manufacturer Infinera for 23 billion US dollars, establishing a comprehensive layout from DCN to DCI, and to optical transmission. Additionally, in October last year, Nokia Oyj Sponsored ADR received a strategic investment of 1 billion US dollars from NVIDIA Corporation (NVDA.US), collaborating on AI-RAN intelligent base stations to upgrade communication networks to edge computing nodes, directly opening up growth opportunities for Nokia Oyj Sponsored ADR in the AI era. With optical modules, data center interconnect, and 5G/6G technology deployment, Nokia Oyj Sponsored ADR is becoming a key builder of the computing power "highway" in the AI era. This has led to a cumulative increase in Nokia Oyj Sponsored ADR's stock price of over 53% year-to-date, pushing its market value to surpass 60 billion US dollars.