A lucrative new artificial intelligence contract with municipal utility network Thüga has done little to arrest a steep decline in Deutsche Telekom shares. The stock, trading at €28.41, has shed roughly 15% of its value over the past month, leaving it deeply oversold despite a recent record dividend payment.
The company confirmed a framework agreement to provide its “Enterprise-GPT” solutions to around 100 municipal service providers within the Thüga group. A key component of the deal is a sovereign AI environment, ensuring all data processing for the energy and water suppliers remains strictly within Europe. For operators of critical infrastructure, this local data sovereignty is a mandatory requirement. The utilities plan to use the technology to automate standard tasks and analyze internal knowledge databases more efficiently.
Strategic Pivot Meets Market Skepticism
This expansion into high-margin software and AI services is a central pillar of Deutsche Telekom’s strategy to transform from a pure network operator into an integrated technology group. Long-term corporate contracts are intended to secure stable cash flows. However, the market has shown little appreciation for these operational advances recently. The share price has fallen more than 13% on a monthly basis, with a current Relative Strength Index (RSI) reading of 24 signaling a massively oversold condition. The gap to the 50-day moving average at €31.92 underscores the intense selling pressure.
Investor caution is rooted in recent financials. Fourth-quarter 2025 results showed revenue growing a solid 2.5% to €31.72 billion, but earnings per share plummeted from €0.85 to €0.44. The stock’s weakness also persisted through the payment of a record €1.00 per share dividend, an 11% increase year-over-year, following the ex-dividend date on April 2.
Should investors sell immediately? Or is it worth buying Deutsche Telekom?
Ambitious Targets and Shareholder Support
CEO Tim Höttges remains committed to the group’s ambitious goals. Adjusted EBITDA AL is projected to rise to €47.4 billion in 2026, up from €44.2 billion the previous year. The company also plans to connect an additional 2.5 million households to its fiber-optic network, building on a 5G coverage that already reaches 99% of the population. In a move to support shareholder returns, a share buyback program with a volume of approximately $2 billion is underway.
Analysts maintain a significantly higher average price target of €38.77, but this alone has failed to inspire buyer confidence. All eyes are now on the first-quarter report due on May 13, 2026, which will serve as the next critical test.
Q1 Report Looms as Key Catalyst
The upcoming quarterly figures will be scrutinized for updates on new B2B initiatives, mobile subscriber growth, and demand for premium fiber connections. The performance and outlook of US subsidiary T-Mobile US, traditionally the group’s most important profit driver, will be a particular focus. The consensus earnings estimate for the full 2026 fiscal year stands at €2.17 per share; the Q1 report will be pivotal in validating this forecast.
Until the mid-May results, the technical picture remains tense. The share must first break the downtrend of recent weeks and sustainably reclaim the €29 level. Failure to do so could bring the 52-week low of €26.45 back within striking distance. Whether the current oversold RSI reading marks a bottom formation depends heavily on the company’s ability to meet expectations.
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