HSBC Lifts Prysmian Target to €170 as AI Cable Demand and Grid Spending Supercharge Growth

Italian cable maker's rally takes a breather at €150; HSBC sees AI-driven fiber demand boosting capacity by 50% as Q1 earnings impress.

Prysmian shares have been on a tear, but the rally is taking a breather near record levels. The stock edged 0.96% lower to €150.00 on Friday, yet the bigger story is how the Italian cable maker has repriced itself in the wake of an extraordinary 67.71% gain since the start of the year and a 23.92% jump over the past 30 days. That kind of move would normally invite profit-taking, and the current pause suggests investors are recalibrating after the rapid ascent.

The valuation question has been sharpened by HSBC's bombshell target hike. The British bank raised its price objective from €115 to €170, keeping a buy rating. Its analysts see Prysmian as a key beneficiary of the artificial intelligence boom — not because of microchips, but because data centers need vast quantities of fiber-optic cable. The company is currently negotiating long-term supply agreements with hyperscalers, and HSBC expects large advance payments that would help expand production capacity by up to 50%.

Those capacity plans tie into a broader growth narrative that goes well beyond AI. Prysmian's first-quarter numbers underscore the breadth of demand. Revenue climbed to €5.218 billion from €4.771 billion a year earlier, with organic growth of 5.0%. The Power Grid segment led the charge with 16.2% organic expansion, while Digital Solutions added 9.0%. Adjusted EBITDA rose to €601 million from €527 million, and the margin — calculated at standard metal prices — improved to 14.2%.

The Transmission segment also flexed its muscles. Adjusted EBITDA there increased to €146 million from €124 million, pushing the margin to 20.1%, a sharp improvement from 16.9% last year. That sort of profitability is one reason the market no longer treats Prysmian as a plain-vanilla industrial stock. Meanwhile, Digital Solutions surprised on the upside: its adjusted operating profit doubled to €88 million in the first quarter, with a margin of 20.6%.

Financial discipline reinforces the investment case. Free cash flow over the past twelve months reached €1.191 billion, up from €1.171 billion for the full year 2025. Net debt fell to €3.818 billion from €4.884 billion, and management aims to cut that further to roughly €2.7 billion by 2026. That deleveraging gives the company firepower for acquisitions. Shareholders have authorized capital measures, and CEO Massimo Battaini is reportedly eyeing transactions worth as much as $4 billion in the electrification space.

A massive order backlog of €17 billion in the transmission business provides visibility, even if the start to the year in that segment was relatively quiet. The real catalysts ahead are the final signing of the hyperscaler fiber deals and the execution of Prysmian's M&A strategy. For now, the stock sits just 3.75% below its 52-week high, with the relative strength index at a neutral 50.2 — hardly overheated. The €150 level has become a key mark. Hold above it and the record zone remains within reach; a decisive slip below could encourage more holders to lock in gains after a remarkable run.