TLDRs;
- Nokia shares jumped 9% as strong AI-driven optical demand lifted investor confidence in the company’s networking business.
- Lumentum’s upbeat revenue outlook highlighted accelerating data-center demand and helped trigger Nokia’s sharp market rally.
- Nokia reported stronger second-quarter sales and profit while AI and cloud orders reached €2.8 billion.
- Investors will now watch whether Nokia can convert its growing order pipeline into revenue and cash flow.
Nokia stock (NYSE: NOK) rallied sharply on Wednesday after an upbeat outlook from optical-component maker Lumentum pointed to continued strength in the infrastructure supporting artificial intelligence and data centers.
Nokia ADRs climbed 9.2% to $10.32, while trading volume reached about 115.6 million shares, roughly one-third above the stock’s average activity. The move added approximately $5 billion to Nokia’s market value in a single session.
The rally was notable because Lumentum’s comments did not point to a specific Nokia contract. Instead, investors appeared to interpret the optical supplier’s strong results as evidence that demand for high-speed networking equipment remains robust as technology companies continue expanding AI infrastructure.
Optical demand lifts Nokia
Lumentum reported quarterly revenue of approximately $1.01 billion, representing a 109% increase from the same period a year earlier. The company also projected revenue of around $1.25 billion at the midpoint of its next-quarter forecast, implying sequential growth of nearly 24%.
That outlook suggested that demand for optical components used in data-center networks remains strong, with supply still struggling to keep pace. Optical technology has become increasingly important as AI workloads require data centers to move enormous amounts of information between servers and computing systems.
For Nokia, the development provides a positive signal for its own networking operations. The company has been positioning its infrastructure business to benefit from rising AI and cloud spending, making broader strength across the optical market particularly relevant to investors.
Nokia’s shares in Helsinki also gained strongly during the session, reinforcing the view that investors were responding to the broader optical-networking trend rather than simply a move in the U.S. market.
AI and cloud business accelerates
Nokia’s own second-quarter figures provided additional support for the stock’s rally. The company reported net sales of €4.82 billion, an 8% increase from the same period last year.
Comparable operating profit rose 18% to €434 million, exceeding the roughly €382 million analysts had expected. The comparable operating margin also improved to 9%, compared with 8.3% a year earlier.
The strongest growth came from Nokia’s AI and cloud business. Sales in the segment reached €446 million, representing a 105% year-over-year increase.
More importantly, Nokia reported €2.8 billion in AI and cloud orders. The company expects roughly half of that amount to be converted into revenue over the following 12 months.
Profit remains complicated
Despite the improvement in comparable earnings, Nokia‘s headline operating result remains under pressure from restructuring and other costs.
Reported operating profit shifted to a loss of €50 million in the second quarter, compared with a profit of €147 million during the same period last year. The difference highlights the impact of Nokia’s ongoing efforts to reshape its operating structure and accelerate cost-saving measures.
The weaker reported figure could remain a concern for investors even as the company’s underlying commercial performance improves. Nokia therefore faces the challenge of turning stronger demand into sustainable earnings while managing the costs associated with its restructuring.
The company maintained its 2026 guidance, targeting comparable operating profit between €2.1 billion and €2.6 billion. A technical adjustment related to discontinued operations increased the guidance range by €100 million, rather than representing an improvement to the underlying forecast.
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