Deutsche Telekom beats profit forecasts and eyes AI funds

Deutsche Telekom AG reported fourth-quarter core profits that exceeded market expectations, buoyed by a stabilizing domestic market in Germany and sustained growth from its operations in the United States via T-Mobile US, Inc.. The company posted adjusted earnings before interest, taxes, and amortization after leases (EBITDA AL) of 10.8 billion euros, outperforming the 10.7 billion euros anticipated by analysts. Despite the strong quarterly results, the group provided a mixed outlook for 2026, balancing ambitious profit targets against slightly lower-than-expected cash flow projections. The telecommunications giant is currently accelerating its artificial intelligence strategy, having established one of the largest AI factories on the continent in collaboration with NVIDIA Corporation. Furthermore, the group is engaged in talks with the retailer Schwarz to submit a joint bid for billions of euros in European Union funding aimed at constructing AI gigafactories. Ferri Abolhassan, head of the T-Systems services division, stated that the company views itself as the leading provider of private and sovereign cloud services in Europe. The division is targeting a 20% revenue increase for its T Cloud Public segment by 2026. However, Chief Executive Timotheus Hoettges expressed significant concern regarding the pace of political support and the clarity of EU funding initiatives. > We were expecting a tender from Brussels since long, and now apparently it has been put off to May, so I would hope that things speed up and politicians take action. Hoettges further noted the increasing difficulty of consolidating resources within the domestic market to ensure data center utilization, citing a lack of government response to surging energy costs. He emphasized that the necessity for infrastructure development rests primarily with the state rather than the corporation alone. > Deutsche Telekom doesnt need a gigafactory, Germany does. > And if politicians do not provide a framework for that, then we will not invest in this kind of project. For the 2026 fiscal year, the group estimates a core profit of 47.4 billion euros, which stands above previous forecasts. However, its free cash flow projection of 19.8 billion euros was slightly below the consensus reached by analysts. Following the announcement, shares of the company saw a minor decline of 0.3%.