Networking & Hardware Nokia 2Q26 Results Underscore a Ramping Optical DCI Opportunity Amid a Tight Supply Environment

Research evidence excerpt

Networking & Hardware Nokia 2Q26 Results Underscore a Ramping Optical DCI Opportunity Amid a Tight Supply Environment

J P M O R G A N North America Equity Research

23 July 2026

Networking & Hardware

Nokia 2Q26 Results Underscore a Ramping Optical

DCI Opportunity Amid a Tight Supply Environment

Nokia (covered by J.P. Morgan European Tech Hardware & Payments analyst IT Hardware/ Telecom & Networking

Sandeep Deshpande) reported 2Q26 results that continued to highlight a strong and Equipment

building demand environment for the optical DCI market, including scale-across Joseph Cardoso AC

opportunities. The company pointed to strong double-digit revenue growth across (1-212) 622-9036

its Optical and IP Networks subsegments, as well as triple-digit growth in both joseph.cardoso@jpmchase.com

revenue and orders for AI & Cloud customers. That said, those strong 2Q26 orders Manmohanpreet Singh

were noted to have benefited from several sizable long-term orders, as customers (1-212) 622-4527

look to secure supply; only about half of the orders received in the quarter are manmohanpreet.singh@jpmchase.com

expected to convert to revenue over the next 12 months vs. the typical conversion Marc Vitenzon

(1-212) 622-3342

within that window. On supply, constraints were characterized as broad and marc.vitenzon@jpmchase.com

industry-wide, with memory flagged as the primary bottleneck. At the same time,

Akanksh Chauhan

Nokia highlighted further progress in expanding its InP manufacturing capacity, (1-212) 622-0045

including the acquisition of NXP's site in Arizona, which is expected to begin akanksh.chauhan@jpmorgan.com

production in 2028 and ramp in 2029. Net-net, we see Nokia's 2Q26 results as J.P. Morgan Securities LLC

supporting a ramping DCI opportunity where supply-demand remains