Why robots need a new kind of network <\/p>\n
Physical AI means software that senses and acts in the real world, from warehouse robots to self-driving cars. Hotard’s written statement put it plainly: “AI-native networks are moving into the physical world.” <\/p>\n
The idea is that those machines will need fast, reliable wireless links, not just data center fiber. Nokia said in April that AI already accounts for about 20% of network traffic and that machine-to-machine traffic will eventually dominate, according to Fierce Network<\/a>. <\/p>\n Nokia is building toward that with what it calls AI-RAN, radio networks that run AI directly on cell sites. Together with T-Mobile and Nvidia (NVDA), Nokia completed what Hotard called “the world’s first AI-RAN call in a live operator network,” according to the report. <\/p>\n Related: Nokia CEO’s ‘2x faster’ AI claim comes with a catch for investors<\/a> <\/p>\n Early results are encouraging. Deutsche Telekom’s lab tests showed typical uplink speed gains of 10% to 15% from AI-based channel estimation, with field tests next, Nokia said in an Oct. 21 announcement<\/a>. <\/p>\n The timeline is still long. Finnish carrier Elisa expects commercial services in 2027, and BT is preparing a live trial in Birmingham that same year, according to the announcement. <\/p>\n Joe Madden, lead analyst at Mobile Experts, told SDxCentral<\/a> that Nokia is “betting the farm” on physical AI. <\/p>\n Story Continues <\/p>\n Today’s growth is still coming from data centers. Sales to AI and cloud customers rose 123% from a year earlier, and Nokia booked \u20ac1.5 billion in new orders from those buyers. <\/p>\n “In AI & Cloud, net sales more than doubled year-over-year and we secured EUR 1.5 billion in new orders,” Hotard said in the report. <\/p>\n More Artificial Intelligence: <\/p>\n The cash side moved the other way. Nokia lowered its free cash flow conversion outlook to 35% to 55% of comparable operating profit, citing working capital investments “to secure supply and support the growth opportunity in 2027,” along with faster restructuring. <\/p>\n It now plans to invest an additional \u20ac400 million in working capital this year. Restructuring charges are expected to reach \u20ac1.1 billion, up from a prior \u20ac800 million estimate, according to Benzinga<\/a>. <\/p>\n Reported operating profit, which includes those charges, fell 22% to \u20ac196 million. <\/p>\n Wall Street sold the beat anyway <\/p>\n The beat was clear. Comparable operating profit of \u20ac605 million topped the \u20ac453 million average in a company-compiled analyst poll, according to MoneyCheck<\/a>. <\/p>\n The stock still fell. Shares were down 5.7% at $8.72 in premarket trading, according to Benzinga<\/a>, and about 2% later on Oct. 22, MoneyCheck reported. <\/p>\n Here is what investors weighed against the beat, according to the company and coverage of the report: <\/p>\n Nokia kept its 2026 comparable operating profit outlook at \u20ac2.1 billion to \u20ac2.6 billion instead of raising it, according to the interim report<\/a>. <\/p>\n Mobile Infrastructure sales grew 5%, partly because revenue was pulled forward from the fourth quarter, the company said. <\/p>\n Nokia expects fourth-quarter sales to rise 20% to 24% from the third quarter, a steep climb, MoneyCheck<\/a> noted. <\/p>\n Hotard said on the earnings call that “we absolutely need the new fab to come online to support the demand that we’re seeing,” SDxCentral<\/a> reported. <\/p>\n Free cash flow math points to a wide range <\/p>\n In my analysis, the cash guidance cut matters more than the headline beat. <\/p>\n Apply the new 35% to 55% conversion range to the \u20ac2.1 billion to \u20ac2.6 billion profit outlook, and 2026 free cash flow lands somewhere between about \u20ac735 million and \u20ac1.43 billion. That is a wide range for a company asking investors to trust a big growth year. <\/p>\n The order book does help. AI and cloud customers made up about 12.2% of sales, Benzinga<\/a> reported, or roughly \u20ac629 million this quarter. The \u20ac1.5 billion in new orders is about 2.4 times that amount, which suggests the demand is still building. <\/p>\n Nokia is also still digesting Infinera, the optical networking company it acquired. It expects to finish that integration by the end of 2026, a year ahead of plan, with \u20ac200 million in net synergies, according to the report. <\/p>\n Two dates Nokia shareholders should watch <\/p>\n Expectations were already high going in. The stock had climbed about 48% this year before the report, MoneyCheck<\/a> noted, so a beat alone was never going to be enough. <\/p>\n If you hold Nokia, the near-term payoff is modest. The board declared a \u20ac0.03-per-share dividend, with a record date of Oct. 27 and payment on Nov. 5, the company said. <\/p>\n The bigger question is whether the growth Nokia is paying for shows up. The company expects its combined optical and IP networking units to grow 25% to 30% in 2027. <\/p>\n I would watch two things on Jan. 28, when Nokia reports full-year results. First, whether fourth-quarter sales hit that 20% to 24% jump. Second, whether free cash flow lands near the top or bottom of the new range. <\/p>\n Robots may well drive the next wave of connectivity. The cash Nokia spends getting there decides whether you get paid for waiting. <\/p>\n Related: The $1 billion bet: how Nokia stake fits Nvidia’s AI roadmap<\/a> <\/p>\n This story was originally published by TheStreet<\/a> on Oct 23, 2026, where it first appeared in the Technology<\/a> section. Add TheStreet as a Preferred Source by clicking here.<\/a> <\/p>\n","protected":false},"excerpt":{"rendered":"Every network boom starts with a new kind of user. First it was people making calls. Then it…\n","protected":false},"author":2,"featured_media":664178,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[4818,220,218,219,72,122,113,176,1941,61,1831,31173,1942,60,1407,12455,12883,174,13047,9115,1611,4755,1943,1944,131,31174,5066,80,31175],"class_list":["post-664177","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-401k","tag-ai","tag-artificial-intelligence","tag-artificialintelligence","tag-business","tag-business-news","tag-economy","tag-finance","tag-financial-information","tag-ie","tag-investing","tag-investment-tools","tag-investor","tag-ireland","tag-market-news","tag-mortgage","tag-mutual-funds","tag-personal-finance","tag-quote","tag-real-estate","tag-retirement","tag-stock","tag-stock-research","tag-stock-valuation","tag-stocks","tag-suze-orman","tag-tax","tag-technology","tag-track-portfolio"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/664177","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=664177"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/664177\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/664178"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=664177"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=664177"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=664177"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}<\/a> Nokia CEO Justin Hotard says physical AI, from robots to self-driving machines, will drive the next wave of connectivity.Andriy Onufriyenko \/ Getty Images AI sales doubled while the outlook tightened <\/p>\n