The core AI signal: sales to AI and cloud customers more than doubled year-on-year, reaching €446 million . The company's data-center networking unit booked €2.8 billion in fresh order backlog, pointing to sustained demand well beyond the quarter .

What Drove the Raised Full-Year Profit Guidance

Nokia raised its full-year outlook on the back of this momentum, expressing confidence that growth would continue through the rest of 2026 . The key drivers:

• Explosive AI/cloud revenue — more than double the prior year, driven by hyperscaler spending on data-center networking gear .
• Margin expansion — comparable operating margin rose to 9.0% from 8.3% a year earlier, helped by product mix shift toward higher-value AI networking equipment .
• Order backlog visibility — the €2.8 billion of fresh AI/cloud orders gives multi-quarter revenue predictability .

How Nokia's AI Infrastructure Play Compares with Alphabet, TSMC, and ASML

Key thematic alignment: All four companies are riding the same AI infrastructure wave, but at different layers of the stack.

• Alphabet represents the hyperscaler demand side — the end customer spending tens of billions on data centers to run AI workloads. Its cloud revenue (+82%) and $205B annual capex plan show demand is accelerating, not peaking .
• TSMC is the foundry bottleneck — the sole high-volume manufacturer of Nvidia's AI accelerators. Record revenue, 77% profit surge, and massive US expansion confirm AI chip orders are still "insatiable" .
• ASML is the enabler's enabler — its extreme ultraviolet lithography machines are required to make the most advanced AI chips. Raising full-year sales guidance and planning 30% capacity expansion signals that chipmakers expect this cycle to last .
• Nokia is the networking infrastructure play — the optical transport, IP routing, and fixed-access gear that connects data centers. Its transformation from legacy telecom supplier to AI data-center networking vendor is what drove the doubling of AI/cloud sales and the raised guidance .

Notable divergence: While Nokia's 8.3% revenue growth is modest compared to TSMC's 36% or Alphabet's 24%, the pace of change in Nokia's AI/cloud segment (+100% YoY) is as dramatic as any. Nokia is effectively pivoting from a flat-to-declining telecom market into a hypergrowth data-center vertical. TSMC and ASML are already pure plays on AI semiconductor demand; Nokia is in an earlier stage of that transformation, which is why the earnings beat and raised guidance carried significant weight — its stock hit a 16-year high after Q1 results and continued its upward trajectory .

Uncertainty note: Alphabet's stock fell ~3% after hours despite the beat, because the $195–$205B capex guide raised Wall Street's anxiety about whether AI spending will deliver commensurate returns . That "show-me" risk is less acute for Nokia, TSMC, and ASML, which sell the picks and shovels regardless of whether hyperscaler ROI materializes immediately.

The core AI signal: sales to AI and cloud customers more than doubled year-on-year, reaching €446 million . The company's data-center networking unit booked €2.8 billion in fresh order backlog, pointing to sustained demand well beyond the quarter .

What Drove the Raised Full-Year Profit Guidance

Nokia raised its full-year outlook on the back of this momentum, expressing confidence that growth would continue through the rest of 2026 . The key drivers:

• Explosive AI/cloud revenue — more than double the prior year, driven by hyperscaler spending on data-center networking gear .
• Margin expansion — comparable operating margin rose to 9.0% from 8.3% a year earlier, helped by product mix shift toward higher-value AI networking equipment .
• Order backlog visibility — the €2.8 billion of fresh AI/cloud orders gives multi-quarter revenue predictability .

How Nokia's AI Infrastructure Play Compares with Alphabet, TSMC, and ASML

Key thematic alignment: All four companies are riding the same AI infrastructure wave, but at different layers of the stack.

• Alphabet represents the hyperscaler demand side — the end customer spending tens of billions on data centers to run AI workloads. Its cloud revenue (+82%) and $205B annual capex plan show demand is accelerating, not peaking .
• TSMC is the foundry bottleneck — the sole high-volume manufacturer of Nvidia's AI accelerators. Record revenue, 77% profit surge, and massive US expansion confirm AI chip orders are still "insatiable" .
• ASML is the enabler's enabler — its extreme ultraviolet lithography machines are required to make the most advanced AI chips. Raising full-year sales guidance and planning 30% capacity expansion signals that chipmakers expect this cycle to last .
• Nokia is the networking infrastructure play — the optical transport, IP routing, and fixed-access gear that connects data centers. Its transformation from legacy telecom supplier to AI data-center networking vendor is what drove the doubling of AI/cloud sales and the raised guidance .

Notable divergence: While Nokia's 8.3% revenue growth is modest compared to TSMC's 36% or Alphabet's 24%, the pace of change in Nokia's AI/cloud segment (+100% YoY) is as dramatic as any. Nokia is effectively pivoting from a flat-to-declining telecom market into a hypergrowth data-center vertical. TSMC and ASML are already pure plays on AI semiconductor demand; Nokia is in an earlier stage of that transformation, which is why the earnings beat and raised guidance carried significant weight — its stock hit a 16-year high after Q1 results and continued its upward trajectory .

Uncertainty note: Alphabet's stock fell ~3% after hours despite the beat, because the $195–$205B capex guide raised Wall Street's anxiety about whether AI spending will deliver commensurate returns . That "show-me" risk is less acute for Nokia, TSMC, and ASML, which sell the picks and shovels regardless of whether hyperscaler ROI materializes immediately.