AI infrastructure boom drives demand growth! Nokia Oyj Sponsored ADR (NOK.US) Q3 operating profit beats expectations, optical network business sales up 18% year-over-year

Title context: AI infrastructure boom drives demand growth! Nokia Oyj Sponsored ADR (NOK.US) Q3 operating profit beats expectations, optical network business sales up 18% year-over-year Text: As the artificial intelligence (AI) infrastructure investment boom drives rising market demand for data center networking equipment, Nokia Oyj Sponsored ADR (NOK.US) reported third-quarter earnings that beat expectations. The financial results show that Nokia Oyj Sponsored ADR's Q3 revenue grew 10% year-over-year to EUR 5.154 billion; adjusted operating profit rose 35% year-over-year to EUR 605 million, far exceeding the analysts' consensus estimate of EUR 454 million. This earnings growth was driven by the delivery of some backlogged data center equipment orders. As 5G network construction slows, demand from traditional telecom customers is expected to remain sluggish, and Chief Executive Officer Justin Hotard is focused on building data centers into a new growth pillar for Nokia Oyj Sponsored ADR. Last year, he launched a development strategy built on the AI infrastructure boom and simultaneously initiated a restructuring, after which Nokia Oyj Sponsored ADR divested several businesses. Nokia Oyj Sponsored ADR said these adjustments are expected to drive double-digit operating profit growth in the coming years. Data shows that Q3 sales in the network infrastructure division, which covers AI data center connectivity business, grew 15% year-over-year to EUR 1.829 billion. Among them, optical network business sales grew 18% year-over-year to EUR 933 million; IP network business sales grew 43% year-over-year to EUR 3.839 billion. Sales in the mobile infrastructure division, which covers traditional mobile equipment business, grew 5% year-over-year to EUR 2.902 billion. However, the rapid expansion of AI infrastructure also poses challenges for equipment manufacturers. Supply of components such as memory chips has been constrained, and prices have risen accordingly. Competitor Telefonaktiebolaget LM Ericsson Sponsored ADR Class B (ERIC.US) said the company has mitigated this impact, partly thanks to customers making advance purchases during contract negotiations to cope with expected price increases. The core of Nokia Oyj Sponsored ADR's turnaround is that it has caught the explosive tailwind of the optical communications industry. As humanity moves into the AI era, AI large models, autonomous driving, embodied intelligence and other applications place higher demands on data transmission speed, capacity and stability, and traditional electrical signal transmission methods have reached their physical limits. Optical communications, which transmit information via optical signals, can deliver high-bandwidth, low-latency transmission and can also reduce energy consumption in long-distance, high-capacity transmission, making it the "highway" for transporting AI computing power. This giant that once dominated the mobile phone market is achieving a turnaround more than a decade after exiting the handset business, now as a leader in communications and AI infrastructure. Nokia Oyj Sponsored ADR has now transformed into the world's second-largest telecom equipment vendor, holding a core position in 5G patents, optical communications and computing power networks. The company holds a large number of core 5G patents; its share of optical communications equipment ranks among the top globally, providing network infrastructure to more than 130 countries worldwide, and most mainstream cloud service providers in North America use its optical transmission solutions. Nokia Oyj Sponsored ADR completed its transformation toward AI and cloud infrastructure through a series of acquisitions. In 2016, Nokia Oyj Sponsored ADR acquired Alcatel-Lucent for EUR 15.6 billion, obtaining Bell Labs' core patents and becoming the world's second-largest optical network equipment supplier; in 2024, it "swallowed" optical network equipment maker Infinera for USD 2.3 billion, thereby forming a full-chain layout from DCN to DCI and then to optical transmission. In addition, last October, Nokia Oyj Sponsored ADR received a USD 1 billion strategic equity investment from NVIDIA Corporation (NVDA.US). The two sides are collaborating on AI-RAN intelligent base stations to upgrade communications networks into edge computing power scheduling nodes, directly opening up Nokia Oyj Sponsored ADR's growth space in the AI era. The mobile network equipment jointly developed by the two sides uses the US chipmaker's advanced chips rather than relying entirely on the dedicated chips long used in traditional telecom networks. The collaboration is part of Justin Hotard's broader strategy to prepare Nokia Oyj Sponsored ADR for the futurewhen AI computing will no longer be confined to data centers but will extend further into communications networks. With its layout in optical modules, data center interconnection and 5G-A/6G technologies, Nokia Oyj Sponsored ADR is becoming a key builder of the computing power "highway" in the AI era.