Deutsche Telekom’s AI Cloud Validated by Soofi S as Stock Climbs From June Lows

Open-source Soofi S LLM trained on Deutsche Telekom's Industrial AI Cloud showcases new revenue stream; stock down 22% from peak but UBS sees 36% upside.

A consortium of German research institutes has rolled out an open-source large language model trained entirely on cloud servers run by Deutsche Telekom, offering fresh evidence that the telecoms group’s pivot into high-performance computing infrastructure is attracting external clients. The model, named Soofi S, boasts 31.6 billion parameters and was developed by Fraunhofer institutes, the German Research Center for Artificial Intelligence (DFKI) and several universities — Telekom itself simply provided the computational muscle through its Industrial AI Cloud based in Munich.

The project was coordinated by the KI Bundesverband (German AI Association) and backed with roughly €20 million from the Federal Ministry for Economic Affairs and Energy, drawn from the European IPCEI-CIS programme. Training ran between March and May on up to 512 Nvidia B200 GPUs, consuming around 253,000 GPU-hours. Soofi S is a Mixture-of-Experts architecture, activating only about 3.2 billion parameters per generated token, which helps it maintain stable throughput on very long contexts — a weak point for denser models such as Apertus 70B or Qwen3 32B. The trade-off is lower accuracy on complex mathematics and extended texts.

Telekom’s enterprise unit T-Systems laid the groundwork for this capability in February 2026 when it launched the Industrial AI Cloud in partnership with Nvidia, aiming to offer European companies AI services that comply with local data protection rules. Soofi S demonstrates that outside partners are already putting that infrastructure to use, though the consortium is now seeking commercial industrial partners to turn the open research model into real-world applications. Any resulting paid usage would help fill Telekom’s cloud capacity and support T-Systems’ growth ambitions.

Against this backdrop, the shares have been under pressure for months. The stock closed at €26.60 on Tuesday, a 22.56% fall from its 52-week high of €34.35 reached in February. It had tumbled to a low of €23.54 in June amid concerns over US satellite competition before staging a partial rebound. From that trough, the share price has climbed roughly 13%. On a weekly basis, the stock has added 4.15%, yet it still shows a year-to-date loss of 4.56% and a 12-month decline of 12.36%. The relative strength index of 51.9 points to a neutral market without overbought or oversold conditions, while the annualised 30-day volatility of 31.37% indicates moderate but noticeable price swings. The company’s market capitalisation stands at €122.6 billion.

Technical indicators paint a mixed picture. The stock currently trades about 2.47% below its 50-day moving average of €27.36 and 7.17% below the 200-day average of €28.74, suggesting the medium-term trend remains weak. That has not deterred UBS, however. The Swiss bank reaffirmed its buy recommendation with a price target of €36.20 — a level that would take the shares well beyond the earlier 52-week high. Reflecting this optimism, a BNP Paribas call warrant with a strike price of €27 and maturity on 8 September 2026 recently traded between €1.29 and €1.31, indicating that some investors are betting on a continuation of the recovery.

Beyond AI and the share price, Deutsche Telekom is pushing ahead with other technology initiatives. The group has taken the lead on the EU’s PETRUS2 project, which aims to build cross-border quantum communication networks as part of the broader EuroQCI programme. Partners include Thales, Airbus and SES. Separately, together with Ericsson, Telekom is deploying a private 5G campus network at HHLA’s Container Terminal Altenweder in Hamburg, a system that has been supporting automated terminal operations since late May 2026.

Operationally, the company also issued a seasonal warning about a spike in smartphone thefts during the travel period, with scammers posing as finders and sending phishing SMS to steal Apple ID or Google account credentials. Hundreds of customers have reported attempts via the shortcode 7726. Telekom advises activating lost mode, blocking the SIM card and never entering credentials through unknown links.

For investors, the narrative remains two-sided. Telekom is making strategic bets on high-growth areas like AI cloud infrastructure and quantum communications, while its core shares are still clawing back territory after a sharp correction. The gap between the June low of €23.54 and UBS’s €36.20 target underscores just how wide the range of expectations has become.