Deutsche Telekom Backs €1 Billion AI Data Center as Elliott Turns Up the Heat on Buybacks
Published on 09/21/2026 at 19:20 | Editorial boerse-global.de
Deutsche Telekom is throwing its weight behind a billion-euro bet on artificial intelligence, joining forces with Nvidia and SAP to build a large-scale AI data center in Munich. The Bonn-based carrier will handle the network infrastructure, Nvidia will supply the hardware, and SAP will contribute the software layer. Up to 10,000 of Nvidia's high-performance chips are slated to power the facility, which the partners intend to run entirely on renewable energy.
Nvidia chief executive Jensen Huang framed the announcement as the dawn of a new era of industrial transformation. The push also answers repeated calls from Bitkom president Ralf Wintergerst, who has argued that Germany's data center capacity must expand to keep pace with surging demand from domestic industry.
A Valuation Gap Worth Closing
For the DAX heavyweight, the joint venture opens a path beyond its traditional telecom business. According to an analysis by Reuters Breakingviews, the group trades at a noticeable discount to the sum of its parts, with its stake in T-Mobile US alone valued at roughly USD 180 billion. Goldman Sachs sees room for a re-rating, setting a price target of EUR 40 on the stock.
The operational backdrop lends credibility to the spending plans. Second-quarter revenue rose year over year to EUR 29.93 billion from EUR 28.67 billion, while adjusted EBITDA after lease costs climbed to EUR 11.82 billion. Management, led by CEO Tim Höttges, is targeting full-year adjusted EBITDA AL of around EUR 47.5 billion and free cash flow of roughly EUR 20 billion. More than a month ago, the board also raised its 2026 share buyback program to as much as EUR 5 billion.
Should investors sell immediately? Or is it worth buying Deutsche Telekom?
Sector Shock From Across the Atlantic
Those ambitions have been unfolding against a choppier market backdrop. A US analyst call rattled European telecom stocks late last week, when Morgan Stanley downgraded France's Orange to "Underweight" and cut its price target to EUR 15. The bank pointed to political uncertainty in France, relentless competition in Spain, and the sector's broader debt load. The ripple was immediate: Vodafone and BT Group both fell sharply, and Deutsche Telekom was dragged into the downdraft on Friday.
By Monday the shares had steadied, edging up 0.1% to EUR 27.19. Investors remain sensitive to warnings about shrinking margins and rising interest burdens at capital-intensive network operators.
Elliott Wants Cash, Not Deals
Pressure is also building from the shareholder register. Roughly three weeks ago it emerged that activist investor Elliott Investment Management had built a sizable stake in Deutsche Telekom. Citing reports from Bloomberg and Handelsblatt, Elliott is urging the company to shelve any merger plans for its US subsidiary T-Mobile US and instead step up share buybacks to unlock value.
On the expansion front, the group is pressing ahead in selected European markets. A transaction still awaiting Polish antitrust clearance is designed to turn T-Mobile Polska into a fully integrated telecommunications operator.
What's Next on the Calendar
Management's near-term schedule offers two focal points for the market. On Monday, October 5, the company will host an investor day dedicated to the opportunities and potential of artificial intelligence. Third-quarter 2026 results are due on Thursday, November 5.
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