Deutsche Telekom’s Raised Forecast Meets Labour Standoff as AI Capacity Sells Out

Deutsche Telekom lifts 2026 profit target to €47.5B after solid Q1, but labor dispute looms; shares down 15% over past year. AI cloud capacity sold out.

The Bonn-based telecom group has lifted its 2026 profit target to roughly €47.5 billion after a solid first quarter, while also guiding for free cash flow to exceed €19.8 billion. Adjusted EBITDA rose 2% year-on-year to €11.52 billion in the opening three months, beating consensus estimates. Yet the shares remain stubbornly weak — closing at €27.70 on Friday, they have shed about 15% over the past twelve months and sit more than 5% below their 200-day moving average.

T-Mobile US continues to provide the bulk of the operational momentum. The American subsidiary posted double-digit growth in service revenue and added more than half a million new broadband customers in the quarter. Deutsche Telekom’s stake in the unit now stands at nearly 54%, and management has confirmed it has no plans to sell down this year.

Beyond core connectivity, the company is making a splash in artificial intelligence. Its “Industrial AI Cloud” facility in Munich, launched in February and equipped with Nvidia B200 chips, has already sold out all available capacity. Meanwhile, the domestic fibre rollout is grinding ahead: 2.2 million customers now have active connections, though the take-up rate of 17.1% suggests many households within reach have yet to sign up.

The upbeat operational picture is being complicated by a brewing labour conflict. Wage talks covering roughly 60,000 employees enter a fourth round on 26–27 May, with trade union ver.di demanding a 6.6% pay rise plus an annual member bonus of €660 over a twelve-month contract. The employer’s current offer has been dismissed as far too weak, and industrial action has escalated: more than 20,000 staff have taken part in warning strikes since 28 April, including a rally of around 2,500 in Potsdam. For the first time, workers at subsidiaries such as Deutsche Telekom Privatkunden-Vertrieb GmbH and T?Systems International GmbH have also been called out in solidarity. The announcement of a €2 billion share buyback for 2026 has added political fuel, with the union arguing the cash could instead fund a better settlement. Ver.di is also linking its pay demands to stronger job security guarantees as digital transformation reshapes roles.

Analysts have so far stayed focused on the fundamentals. Deutsche Bank reiterated a “Buy” rating with a €42 target, Goldman Sachs kept “Buy” at €40, and Bernstein Research maintained “Outperform” with a €37 target, noting that the first?quarter numbers were within expectations. The stock’s technical picture is mixed: while the relative strength index of 64.2 suggests no oversold condition, the shares have lost nearly 3% over the past month and remain well below both the 50?day and 200?day averages.

All eyes now turn to the negotiating table at the end of May. A significantly improved offer could defuse the labour tension and allow the market to refocus on the raised guidance and the AI?cloud opportunity. A hardened standoff would, however, bring the cost of social stability squarely into the earnings narrative.