Prysmian it resizes to Business Square after Friday's record: the title of the producer of Cavi for the 'electric energy , telephony is losing almost 9%. The decline must be seen on the one hand in the much broader movement of the sEuropean companies which are somehow connected to the laying of the infrastructure for the'artificial intelligence, following the announcement of the performances of the Chinese startup DeepSeek, on the other hand to the judgment of Morgan Stanley this morning. The two motivations triggered profit taking after the good performance on Friday. At mid-session the title in Piazza Affari quote 66,00 euros, down 8,33%, a price that is worth a capitalization of 19,52 billion euros, after a minimum marked at 65,02 euros.
The connection with the new Chinese startup DeepSeek. Siemens also falls
Prysmian was also taken in negative vortex of many companies of the technological sector after the news emerged from Chinese media during the night of the excellent performance of Chinese startup DeepSeek a low cost. In practice, the Chinese app questions the hypothesis that the world, in order to accommodate artificial intelligence, needs a huge network of ultra-energy-hungry data centers. Consequently, the assumptions about the need to strengthen electricity transmission networks are undermined: exactly Prysmian's business. According to analysts at Akros Bank, The Chinese model “consumes less energy and is less expensive to develop” than ChatGpt and the news could be negative for the sector’s supply chain.
Prysmian had recently been in the market spotlight precisely in light of thehigh energy consumption necessary for the AI data center after Trump announced Stargate, a joint venture between Softbank, Oracle and OpenAI to invest in data centers in the United States for artificial intelligence. Prysmian through Encore Wire he has increased his exposure to data center business. “The development of data centers requires significant infrastructure and high energy consumption. Prysmian is exposed to this business, with adirect exposure of about 800 mbillion euros in turnover, but above all indirectly through the business linked to electricity networks, where Encore Wire stands out as one of the main operators" comment the experts of Equita who in any case have a target price of 70 euros on the stock with a 'hold' recommendation.
Also paying the price is Siemens Energy on the Frankfurt Stock Exchange, -20%, the largest daily negative variation since 2023. The shares of the renewable energy operator had more than quadrupled during 2024 precisely on expectations of a rush to build green production plants for data centers. Also on the German stock exchange, it fell Schneider Electric -8%, in Paris, Legrand -7%.
Morgan Stanley files Prysmian down to 64 euros from 65 euros
Prysmian is also hit today by the Morgan Stanley's target price adjustment, from 64 euros to 65 euros. The intervention is contained in the report which confirms the neutral judgment: Equal Weight. The analysts have updated their estimates for the Renewables Transmission division, consequently lowering the group's 2,6 Ebitda forecast by 2028%. "In light of Prysmian's recent announcement that they have decided to halt their expansion plans in the US through their Brayton Point site, we are making negative adjustments to our 2027-2028 growth forecast for Renewable Transmission. We understand that Prysmian intends to reallocate this capex to alternative expansion opportunities, but our study suggests that a project of a similar scale (we estimate €500-800 million in revenues) is unlikely to materialize", the experts clarify.
