Helsinki, August 5, 2026 — Nokia Oyj shares edged higher in Wednesday morning trading, extending a recent rebound as investors shifted attention from the order surge to the company's ability to convert that demand into revenue. The stock was up 0.7% at €8.69 by 11:32 EEST, roughly flat from its July 23 earnings-day close but 15% above the July 29 low.
The market's focus has moved beyond headline growth. Nokia's first-half AI and cloud orders totaled €3.8 billion, nearly five times the preliminary estimated sales of €806 million to those customers. The order-to-sales ratio jumped from about 2.8 times in the first quarter to 6.3 times in the second, signaling a rapid acceleration in demand visibility. However, this is not a formal backlog figure, and the company has yet to convert a significant portion of these orders into recognized revenue.
CEO Justin Hotard acknowledged the industry-wide supply constraints, stating, "Demand remains strong, while supply continues to be the main industry constraint." He noted that customers are responding by placing longer-term orders, a trend that supports Nokia's forward visibility but also introduces execution risk.
Nokia expects roughly half of its second-quarter order intake to convert into revenue within the next 12 months, an amount equivalent to approximately €1.4 billion, or 3.1 times the quarter's AI-related sales. The timing of this conversion is critical, as the company's guidance for the second half assumes sequential growth in Q3 and a more meaningful uplift in Q4.
The operating scorecard adds weight to these orders. Second-quarter comparable operating profit beat the LSEG consensus by 13.6%, with net sales rising 8% to €4.815 billion and gross margin improving 70 basis points to 46.0%. Diluted EPS jumped 75% to €0.07. The improvement was led by Network Infrastructure, where sales rose 12% and operating margin expanded to 8.1% from 6.4%. Optical Networks grew 20% and IP Networks 16% at constant currency, with AI orders spanning both businesses.
Compared to rival Ericsson, Nokia's growth advantage widened. Nokia's group sales rose 8% in Q2 versus Ericsson's 6% decline, and Nokia's network unit sales grew 12% against Ericsson's 8% drop. However, Ericsson retains a higher adjusted gross margin at 48.4%, and its CFO, Lars Sandström, highlighted the industry-wide pressure from AI build-outs, which have led to higher component costs.
Nokia's full-year guidance remains at €2.1 billion to €2.6 billion in comparable operating profit, after a technical reclassification. The company expects Q3 sales to rise 3% to 7% sequentially, with comparable operating profit broadly flat before a significant Q4 increase. Risks include supply constraints that could delay order conversion and component inflation that may pressure margins. Nokia also anticipates €800 million in restructuring charges and €700 million to €800 million in related cash outflows.
Despite the positive order momentum, the stock remains 42% below its 52-week high of €15.00. The rally has yet to fully recover from the post-earnings selloff. The key test for Nokia is whether it can convert its long-order book into revenue without sacrificing margin. If successful, the rebound will be built on earnings, not just orders.
