> ## Content Index > Fetch the complete content index at: https://www.sotkn.com/llms.txt > Use this file to discover other available public pages before exploring further. # Nokia AI cloud sales up 123% as it adds €400M to secure supply - URL: https://www.sotkn.com/catalyst/nokia-ai-cloud-sales-123-percent-400m-secure-supply/ - Published: 2026-10-22T11:23:47.000Z - Updated: 2026-10-22T11:23:47.000Z - Description: Nokia's sales to AI and cloud customers more than doubled to EUR 631 million while their orders hit EUR 1.5 billion, and Nokia is adding EUR 400 million of working capital to secure parts, a sign the data centre network is the next step where supply sets the pace. - Author: Sean - Tags: #desk-catalyst, #step-networking Stack step Stack layer Networking Status Tightening (orders run well ahead of sales; Nokia is spending extra cash to secure parts for 2027) Market Finland, United States, Europe Event date 22 Oct 2026 Confidence Filed (Nokia interim report for the third quarter) Nokia's sales to AI and cloud customers more than doubled to EUR 631 million in the third quarter while orders from them reached EUR 1.5 billion, and Nokia now plans an extra EUR 400 million of working capital this year to secure supply, which tells us the network between and inside AI data centres is the next step where parts, not demand, set the pace. ## What happened? - **The report:** On 22 October 2026 Nokia published its interim report for the third quarter of 2026\. Group net sales were EUR 5.15 billion, up 10% reported and 9% at constant currency. Comparable operating profit rose to EUR 605 million from EUR 448 million a year earlier. - **AI and cloud customers:** Net sales to the group Nokia calls AI & Cloud (hyperscalers, AI labs and cloud operators) were EUR 631 million, against EUR 279 million a year earlier, up 123% at constant currency. Order intake from the same customers grew 118%, and chief executive Justin Hotard said Nokia "secured EUR 1.5 billion in new orders" from them in the quarter. - **The two AI businesses:** IP Networks (routers and data centre switches) had net sales of EUR 839 million, up 43% at constant currency. Optical Networks (the fibre systems that link data centres, now including Infinera, which Nokia expects to finish integrating by the end of 2026) had net sales of EUR 933 million, up 18%. Nokia expects the two together to grow by 25% to 30% in 2027, and to grow somewhat above its earlier 18% to 20% assumption in 2026. - **The cash line:** Nokia lowered its free cash flow conversion assumption for 2026 to 35% to 55% of comparable operating profit, because it is "now planning to invest an additional EUR 400 million in working capital this year" to secure supply and support growth in 2027\. Working capital took about EUR 560 million of cash in the third quarter alone, and free cash flow was minus EUR 99 million. ## Why does it matter? **The direct signal.** AI customers are now a real share of Nokia, not a footnote. Our arithmetic: AI & Cloud was about 12% of group net sales in the quarter, up from about 6% a year earlier. Over the first nine months, sales to these customers reached EUR 1.425 billion against EUR 680 million in the same period of 2025. **The second-order signal: orders are running far ahead of what Nokia can ship.** Our arithmetic: EUR 1.5 billion of new AI & Cloud orders against EUR 631 million of AI & Cloud sales is a book-to-bill of about 2.4\. In plain words, for every euro Nokia billed these customers in the quarter, they ordered about 2.4 euros more. That gap is backlog, and backlog becomes sales only when the parts arrive and the gear is built. That is why the same report that raises the growth view also cuts the cash view: Nokia is paying now for components and stock so it can ship in 2027. **Why the network is the step to watch.** An AI cluster does not stop at the GPU. The chips inside one hall talk over switches, and halls and campuses talk to each other over long fibre links, which is what Nokia's optical business sells. As hyperscalers link more halls and campuses together, every new site adds fibre and switching, not only servers. Nokia ties this to Google's plan to invest at least EUR 13 billion in Finland in 2027 and 2028, announced on 9 September, where Nokia supplies optical and IP networks. **The pattern.** This rhymes with what Nvidia did on 21 October, when it paid suppliers in advance for substrates, interposers, test and optical engines ([our Catalyst on that](https://www.sotkn.com/catalyst/nvidia-2-5x-substrates-300-percent-interposer-capacity/)). In both cases the company closest to the AI buyer is using its own balance sheet to secure the parts behind the next year of sales. Nvidia did it with prepayments; Nokia is doing it with inventory and supplier commitments. ## What does it change? **Near term (to mid-2027)** - **Margins feel the ramp first.** Network Infrastructure gross margin fell to 41.2% from 42.7%, which Nokia puts down to product mix and the ramp-up of new products for AI & Cloud customers in IP Networks. It expects a recovery in the fourth quarter from scale and pricing discipline. If that recovery does not show, the new AI products are costing more to build than planned. - **Cash, not demand, is the near-term limit.** The extra EUR 400 million of working capital, on top of a third-quarter outflow of about EUR 560 million, means Nokia is carrying more stock and receivables. Inventories rose about EUR 130 million and receivables about EUR 230 million in the quarter. That cash is spent before the AI orders turn into revenue. - **A big fourth quarter is assumed.** Nokia assumes net sales rise 20% to 24% from the third quarter to the fourth. Some of the third quarter's mobile radio sales were pulled forward from the fourth quarter, so the AI businesses have to carry more of that step-up. **Longer term (2027 and after)** - **Optical capacity is the thing to build.** Nokia cut its 2026 capital spending assumption to EUR 750 million to EUR 850 million, partly because some cash payments for optical manufacturing move into 2027\. It says the optical manufacturing expansion itself remains on track. That points to new optical lines arriving in 2027, which is when the 25% to 30% growth has to be shipped. - **A shift in who sells the network.** Nokia sold mostly to telecom operators for decades. Telecom providers were still EUR 3.64 billion of the quarter's sales, flat at constant currency, while AI & Cloud more than doubled. The growth in network equipment is moving from phone companies to hyperscalers, so their spending plans now drive this layer too (see [Who Are the Hyperscalers?](https://www.sotkn.com/explained/who-are-the-hyperscalers/)). - **What we cannot see yet:** how much of the EUR 1.5 billion is optical versus IP, how long the backlog takes to ship, which named customers placed the orders, and which components are short. Nokia's risk section names semiconductors among the parts it may not be able to procure; it does not say which ones. | Metric | Value | Source name | Date | | ---------------------------------------- | ------------------------------------------------------------------------------ | ----------- | ----------- | | AI & Cloud net sales, Q3 2026 | EUR 631 million (EUR 279 million a year earlier), up 123% at constant currency | Nokia | 22 Oct 2026 | | AI & Cloud new orders, Q3 2026 | EUR 1.5 billion; order intake up 118% | Nokia | 22 Oct 2026 | | IP Networks / Optical Networks net sales | EUR 839 million (+43%) / EUR 933 million (+18%), constant currency | Nokia | 22 Oct 2026 | | Extra working capital planned for 2026 | EUR 400 million, to secure supply and support 2027 growth | Nokia | 22 Oct 2026 | | Optical and IP growth view for 2027 | 25% to 30% | Nokia | 22 Oct 2026 | | AI & Cloud book-to-bill, Q3 2026 | About 2.4 (our arithmetic) | Nokia | 22 Oct 2026 | ## What should we watch next? - **28 October 2026:** Microsoft and Alphabet report. Their capital spending lines, and anything Alphabet says about the Finland build, show whether the orders behind Nokia's backlog keep coming. Both are on the [Catalyst calendar](https://www.sotkn.com/catalyst/calendar/). - **3 November 2026:** Arista Networks reports third-quarter results after the US close (call at 1:30 pm Pacific time, 04:30 SGT on 4 November). Arista sells data centre switches to the same hyperscalers, so it is the closest read on whether the IP Networks growth is market-wide or share gained by Nokia. - **Fourth-quarter margin:** Nokia said Network Infrastructure gross margin should recover in the fourth quarter. Its full-year report is planned for 28 January 2027. - **What would weaken the catalyst:** order intake from AI & Cloud slowing below sales growth, the EUR 400 million build turning into excess stock, or the optical manufacturing expansion slipping beyond 2027. ## Also on the tape - **21 Oct:** Lam Research reported record quarterly revenue of $8.22 billion for the quarter ended 27 September, up 22% from the June quarter, and guided December-quarter revenue to $8.60 billion, plus or minus $400 million (Lam Research). - **21 Oct:** Texas Instruments reported third-quarter revenue of $6.06 billion, up 28% from a year earlier, with chief executive Haviv Ilan citing continued broad growth in industrial, automotive and data center (Texas Instruments). - **21 Oct:** SK hynix said it will release third-quarter 2026 results before 9:00 am Seoul time on 28 October, followed by a conference call at 9:00 am (SK hynix). ## FAQ **What did Nokia report on 22 October 2026?** Third-quarter net sales of EUR 5.15 billion, up 9% at constant currency, with sales to AI and cloud customers up 123% to EUR 631 million and EUR 1.5 billion of new orders from them. Its full-year outlook for comparable operating profit, EUR 2.1 billion to EUR 2.6 billion, is unchanged. **What does Nokia sell to AI data centres?** Two things. Optical Networks sells the fibre systems that connect data centres to each other over long distances. IP Networks sells routers and data centre switches that move traffic inside and between sites. **Why is Nokia spending an extra EUR 400 million on working capital?** Nokia says the money goes into working capital during 2026 to secure supply and support the growth it expects in 2027\. Working capital means stock, parts and money owed by customers, so the cash is spent before the related sales are booked. **What is book-to-bill?** New orders divided by sales in the same period. Above 1 means the backlog is growing. Our arithmetic puts Nokia's AI & Cloud figure at about 2.4 for the third quarter. **Takeaway:** Nokia's AI customers are ordering about 2.4 times what it can bill them, and the company is spending cash on parts now so the data centre network does not become the step that holds back the 2027 build. ## References 1. [Nokia, "Nokia Corporation Interim Report for Q3 2026" (full report)](https://www.nokia.com/system/files/2026-10/nokia%5Fresults%5F2026%5Fq3.pdf?ref=sotkn.com), 22 Oct 2026\. All Nokia sales, orders, margin, working capital, capital spending and outlook figures, and the Justin Hotard quote. 2. [Nokia, "Nokia Corporation Interim Report for Q3 2026" (stock exchange release)](https://www.nokia.com/newsroom/nokia-corporation-interim-report-for-q3-2026/?ref=sotkn.com), 22 Oct 2026\. Summary, outlook assumptions and the 28 January 2027 results date. 3. [Google, "Google Deepens Commitment to Finland with Two-Year €13 Billion investment in AI Infrastructure"](https://www.googlecloudpresscorner.com/2026-09-09-Google-Deepens-Commitment-to-Finland-with-Two-Year-EUR13-Billion-investment-in-AI-Infrastructure?ref=sotkn.com), 9 Sep 2026\. The investment size, years and sites. 4. [Arista Networks, "Arista Networks to Announce Q3 2026 Financial Results on Tuesday, November 3, 2026"](https://www.arista.com/en/company/news/press-release/pr-2026?ref=sotkn.com), 6 Oct 2026\. The results date and call time. 5. [Lam Research, "Lam Research Corporation Reports Financial Results for the Quarter Ended September 27, 2026"](https://investor.lamresearch.com/2026-10-21-Lam-Research-Corporation-Reports-Financial-Results-for-the-Quarter-Ended-September-27,-2026?ref=sotkn.com), 21 Oct 2026\. Revenue and December-quarter guidance. 6. [Texas Instruments, "TI reports third quarter 2026 financial results and shareholder returns"](https://www.ti.com/about-ti/newsroom/news-releases/2026/2026-10-21-ti-reports-third-quarter-2026-financial-results-and-shareholder-returns.html?ref=sotkn.com), 21 Oct 2026\. Revenue, growth and the CEO comment. 7. [SK hynix, "Q3 2026 Earnings Conference Call Invitation"](https://news.skhynix.com/en/q3-2026-earnings-conference-call-invitation/?ref=sotkn.com), 21 Oct 2026\. The results date and call time. Not investment advice. The AI & Cloud share of sales and the book-to-bill figure are our arithmetic from Nokia's report.