Finnish telecom giant Nokia has unveiled strategy changes and ambitious goals.
CEO Justin Hotard’s comprehensive overhaul, announced during the company’s Capital Markets Day, targets annual operating profits of €2.7 to €3.2 billion by 2028 — representing a potential 60% surge from the €2 billion generated over the last 12 months.
Nokia isn’t just making promises — they’re already delivering results. Last month, the company’s third-quarter comparable operating profit hit €435 million, crushing analyst expectations of €342 million. That’s a 27% earnings beat that sent shockwaves through Wall Street and confirmed something industry insiders have been whispering about: Nokia’s AI transformation is working.
The numbers tell a story of unprecedented momentum. AI and cloud customers now account for 6% of group sales, up from less than 2% just a year ago — a 200% increase that demonstrates the explosive demand for Nokia’s AI infrastructure. Starting January 1, 2026, the company will restructure its entire operation around five strategic AI-focused priorities, according to today’s strategy announcement.
Billion-dollar partnership
Three weeks ago, Nokia secured a helpful alliance. Nvidia’s $1 billion investment in Nokia, announced in late October, represents far more than capital injection — it’s a partnership designed to pioneer AI-native 6G networks that could redefine global telecommunications infrastructure.
This collaboration directly targets the rapidly expanding AI-RAN market, which analysts project will exceed a cumulative $200 billion by 2030. Field trials are scheduled to begin in 2026, focusing on performance and efficiency validation for customers, with industry heavyweight T-Mobile U.S. already working alongside both companies to integrate AI-RAN technologies into their 6G development processes.
The timing is useful. Nokia’s network infrastructure sales surged 28% year-over-year, based on data from last month. Hotard emphasized that AI and data center demand continues to be robust.
Acquisition unlocked
While competitors focused on traditional telecom battles, Nokia executed a move that’s now generating returns. The company’s $2.3 billion acquisition of Infinera, completed earlier this year, transformed Nokia into the second-largest optical networking vendor with a commanding 20% market share.
The timing proved useful again as AI demand exploded across data centers worldwide. Nokia’s optical networks business grew 19% on a constant currency basis, with AI and cloud customers representing 14% of network infrastructure sales in the third quarter.
The Infinera deal delivered dividends, with hyperscaler customers accounting for 5% of Q2 sales. Nokia is amplifying this success by announcing a second Indium Phosphide semiconductor facility in San Jose, California, scheduled to open by late 2026, positioning the company to dominate the insatiable demand for AI-driven optical networking components.
Implications for global connectivity
Nokia’s changes signal a shift in telecommunications infrastructure thinking. The company’s restructuring into two primary segments — Network Infrastructure and Mobile Infrastructure — represents repositioning to capture what Hotard calls “the AI supercycle” that’s reshaping global communications architecture.
The financial metrics reveal an industry in rapid transformation. Nokia’s comparable net profit soared 76% to €977 million this past February, while the company’s stock gained 29% over the past year. This performance comes as Nokia projects savings between €800 million and €1.2 billion in annual costs by 2026.
The ramifications extend far beyond Nokia’s balance sheet. With global network traffic demand projected to grow at 22-25% annually through 2030, the company’s AI-first approach positions it at the epicenter of the next technological revolution. Nokia powers the backbone that will enable autonomous vehicles, smart cities, and immersive metaverse experiences.
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