Nokia shares surge as AI boom boosts Q1 sales

(Sharecast News) - Nokia's share price hit a 16-year high on Thursday after first-quarter results impressed investors with strong growth in the Optical Networks division as sales from AI and cloud customers soared.

The Helsinki-listed telecoms stock was up nearly 11% at �9.43, hitting a level not seen since March 2010, after the company raised its growth outlook for Optical and IP Networks operations.

Comparable net sales were up 4% year-on-year at constant currencies in the first quarter at �4.50bn, while a 270 basis-point improvement in gross margins to 44.2% helped the company swing to an operating profit of �62m from a �21m loss the year before.

Network Infrastructure net sales grew 6% over the previous year at constant FX, with a strong contribution from Optical Networks which grew 20%. Within this, net sales from AI & Cloud customers were up 49%.

Meanwhile, Mobile Infrastructure net sales were up 3% at constant FX with Core Software growing 5% and Technology Standards up 10%, outweighing a flat performance in Radio Networks.

Chief executive Justin Hotard said the firm was "currently tracking somewhat above the mid-point of our full year financial outlook of EUR 2.0 to 2.5 billion in comparable operating profit".

"At our Capital Markets Day in November, we outlined our view of the AI supercycle and the market opportunity for Nokia. Since then, demand has accelerated significantly. We now expect the addressable market in AI & Cloud to grow at a 27% CAGR (2025-2028), compared to the 16% we estimated in November," he said