Nokia Corp. (NOK  ) stock edged lower in premarket trading Thursday despite the telecom equipment maker reporting second-quarter results that topped Wall Street estimates, driven by strong demand for AI data center networking products. Nokia Earnings Beat Expectations

The Finnish company reported second-quarter net sales of 4.82 billion euros ($5.60 billion), up 8% from a year earlier, or 9% on a constant-currency basis. The result narrowly topped analysts' estimate of $5.59 billion. Adjusted earnings came in at 8 cents per share, ahead of the consensus estimate of 7 cents.

Network Infrastructure revenue rose 12% year over year, led by 19% growth in Optical Networks and 15% growth in IP Networks. Mobile Infrastructure revenue increased 6%, supported by gains in Radio Networks and Technology Standards.

AI Data Centers Drive Growth

Chief Executive Officer Justin Hotard said demand from AI data center customers continued to accelerate as Nokia expands beyond its traditional telecom business.

AI and Cloud revenue more than doubled, rising 103% from a year earlier to account for 9.3% of total group sales. Nokia also secured 2.8 billion euros in orders from AI and cloud customers during the quarter.

In an interview with Bloomberg on Thursday, Hotard said memory remains the industry's biggest supply constraint and expects shortages to continue through 2027. He said Nokia is pursuing longer-term memory supply agreements, designing products that rely less on scarce components and intends to pass higher costs on to customers.

Nokia also agreed to acquire a chip fabrication campus in Chandler, Arizona, from NXP Semiconductors N.V. (NXPI  ), subject to regulatory approvals. The company plans to lease manufacturing capacity beginning in early 2027 before converting the site to produce optical components used in AI data center chips.

Separately, Nokia is working with NVIDIA Corp. (NVDA  ) on AI-powered networking technology designed to help wireless operators transmit up to twice as much data over existing spectrum. Hotard said software subscriptions are expected to become the primary growth driver for the company's radio access network business.

Raises Full-Year Profit Outlook

Nokia raised its full-year 2026 comparable operating profit forecast to 2.1 billion euros to 2.6 billion euros, up from its previous outlook of 2.0 billion euros to 2.5 billion euros.

The company reaffirmed its expectation for Network Infrastructure sales growth of 12% to 14% on a constant-currency and portfolio basis, including 18% to 20% growth across its Optical and IP Networks businesses.

For the third quarter, Nokia expects net sales to increase 3% to 7% sequentially, implying revenue of roughly $5.77 billion to $5.99 billion, compared with analysts' estimate of $5.83 billion.

The company expects third-quarter operating profit to remain broadly flat from the second quarter because of the timing of software revenue recognition, followed by a more meaningful increase in the fourth quarter.

Nokia Price Action

NOK Price Action: Nokia shares were down 0.88% at $10.19 during premarket trading on Thursday, according to Benzinga Pro data.