Prysmian’s AI Infrastructure Play Drives Shares to Record Highs, But Valuation Concerns Loom
09.05.2026 - 00:00:34 | boerse-global.de
The Italian cable maker Prysmian has become an unlikely star in the artificial intelligence boom, with its shares surging to fresh all-time highs as investors pile into companies supplying the physical backbone of the digital economy. Yet the rally has sparked a sharp divide among analysts, with some warning the stock has run far ahead of fundamentals.
Deutsche Bank Joins the Bull Camp
Deutsche Bank has thrown its weight behind the stock, upgrading Prysmian to a buy and more than halving its previous price target — lifting it from €100 to €167. Analyst Nabil Najeeb argues the company sits at the intersection of three critical infrastructure bottlenecks: power grids, medium-voltage cables for data centers, and fiber-optic connections. As AI workloads demand ever greater bandwidth and electricity, Prysmian’s strong local presence in the US market gives it a direct line to the largest cloud providers.
The optimism is backed by solid numbers. First-quarter revenue reached €5.2 billion, while the operating margin improved to 14.2 percent. The company is planning a 40 percent expansion of its global fiber and cable production capacity to meet surging demand.
Shares jumped nine percent on the day of the upgrade, hitting a record €153.25 in Milan. That brings the year-to-date gain to over 71 percent — a staggering run that has nearly tripled the company’s market value in just twelve months.
Should investors sell immediately? Or is it worth buying Prysmian?
Skeptics Sound the Alarm
Not everyone is convinced. Banca Akros raised its price target to €110 but simultaneously downgraded the stock to “Reduce,” arguing that the electrification opportunity is already fully priced in. Morningstar goes further still, valuing Prysmian at just €25 per share — implying a 273 percent premium over what it considers fair value. Market observers note this wide gap between the current price and the average analyst target as a potential sign of overheating.
Technical indicators reinforce the caution. With a relative strength index above 77, the stock is firmly in overbought territory.
Financial Strength and Strategic Ambitions
Management remains focused on growth. For the full year, Prysmian targets adjusted EBITDA of up to €2.8 billion and free cash flow of €1.4 billion. Credit rating agency EthiFinance responded to the operational momentum by upgrading the company’s creditworthiness to BBB. The group aims to reduce its leverage ratio to 2.1 times EBITDA by 2027, a goal that hinges on the smooth integration of recent multibillion-dollar acquisitions in the US.
Prysmian at a turning point? This analysis reveals what investors need to know now.
The next major test comes with the half-year results, when management has signaled it may raise its guidance. Whether that will be enough to sustain the current valuation — or whether the skeptics will be vindicated — remains the central question for investors riding this high-voltage rally.
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