STOCKHOLM 17 April 2026 (The Capital Post) – Swedish telecom equipment giant Ericsson has reported first-quarter profits that fell slightly short of market expectations, as rising semiconductor costs linked to artificial intelligence demand weighed on earnings.
The company posted an adjusted operating profit of 5.2 billion Swedish crowns (about US$566 million), below analyst estimates of around 5.4 billion crowns, while also noting softer performance in key markets such as North America.
Ericsson said the weaker-than-expected result was mainly driven by higher input costs, particularly for chips, as global demand for AI infrastructure continues to push up semiconductor prices across the industry. The company also pointed to slower sales momentum in North America as a contributing factor.
Despite the earnings miss, Ericsson highlighted continued strategic progress in its network equipment business, where it remains one of the leading global suppliers alongside Nokia. However, executives acknowledged that near-term margins remain under pressure due to cost inflation and uneven telecom investment cycles.
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The firm’s revenue for the quarter came in at 49.3 billion crowns, slightly below forecasts, reflecting both currency effects and cautious spending by telecom operators in several regions.
Chief Executive Börje Ekholm said the company is navigating a challenging environment where AI expansion is simultaneously boosting long-term demand for network infrastructure while increasing short-term production costs.
Analysts noted that Ericsson’s results highlight a broader trend across the tech and telecom supply chain, where AI-driven hardware demand is tightening supply and raising component prices, especially for advanced chips used in network systems.
Even with the profit miss, the company maintained its outlook for long-term growth, banking on continued 5G deployment, enterprise network expansion, and future AI-related infrastructure investment.
Market observers said investor focus will now shift to whether Ericsson can stabilise margins in upcoming quarters as supply chains adjust to sustained AI-driven demand. -The Capital Post