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‘Gamestop Effect’ Drives Eutelsat’s 650% Surge Amid Retail Traders’ Frenzy

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Shares of Franco-British satellite operator Eutelsat surged dramatically this week, with gains reaching nearly 650% over four days, as retail traders appeared to be behind the movement, reminiscent of the “Gamestop effect” seen in 2021. This sudden rally in Eutelsat’s stock follows speculation that the company could replace Elon Musk’s Starlink in providing internet access to war-torn Ukraine, reigniting investor interest in a stock that had previously hit record lows.

On Thursday, Eutelsat’s shares rose another 18%, pushing the company’s value to over €4 billion ($4.3 billion), although they eventually retreated by 11% in the face of heavy trading volumes. This followed a six-fold increase in the prior three sessions, marking a remarkable short squeeze, according to Bernstein analyst Aleksander Peterc. The move is seen as one of the most substantial short squeezes, driven by retail traders amplifying the effects of geopolitical tensions and speculations about the company’s future role in satellite communication for Ukraine.

The rally began after a public dispute between Ukrainian President Volodymyr Zelenskiy and U.S. President Donald Trump last Friday, which led to the suspension of military aid to Ukraine. The excitement around Eutelsat also gained momentum from intense discussions in French retail forums, particularly on Boursorama, and continued interest in platforms like Germany’s Tradegate. Eutelsat has become one of the most traded stocks on these platforms this week, surpassing even major defense stocks.

Stephane Ekolo, an equity strategist, pointed out that retail traders were likely behind the short squeeze, as hedge funds had shorted the stock, leading to heavy covering of positions. Despite this surge, analysts caution that the stock’s price reflects investor hope more than solid fundamentals. In January, Moody’s had downgraded Eutelsat’s rating, citing struggles with its OneWeb satellites and cash flow pressures due to significant investment needs.

Additionally, Eutelsat is reportedly in talks with the European Union about providing more internet access to Ukraine, potentially boosting its prospects further. The company is also discussing a deal with the Italian government for secure satellite communications. Despite this, Fitch downgraded the company’s long-term rating, citing its need for additional funding of $4.2 billion by 2032.

Microsoft to Invest $300 Million in South Africa’s AI Infrastructure Expansion

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Microsoft has announced plans to invest an additional 5.4 billion rand ($296.81 million) in South Africa by 2027 to expand its cloud and artificial intelligence (AI) infrastructure, catering to the increasing demand for Azure services in the region.

At a Johannesburg event on Thursday, Microsoft Vice Chair and President Brad Smith revealed the company’s strategy to support digital skills development. Microsoft will cover the cost of technical certification exams for 50,000 individuals in areas of high demand, including cloud architecture, AI, and cybersecurity.

This new investment builds on Microsoft’s previous expenditure of 20.4 billion rand, which was used to establish South Africa’s first enterprise-grade data centres in Johannesburg and Cape Town. These facilities have positioned the country as a critical hub for data centres to meet the growing computational needs of AI as businesses look to integrate the technology into their services.

Looking ahead, Microsoft plans to spend approximately $80 billion globally in fiscal 2025 to advance data centre infrastructure, with a focus on training AI models and deploying AI-powered applications and cloud services.

Areim Secures $481 Million for Sustainable Data Centers

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Swedish fund manager Areim has raised €450 million ($481 million) to support the development of sustainable data centers, reinforcing efforts to reduce the environmental impact of the energy-intensive sector. The investment comes amid growing concerns over data center emissions, which are projected to reach 2.5 billion metric tons of CO₂-equivalent by 2030, according to Morgan Stanley.

Leif Andersson, founder of Areim and chairman of EcoDataCenter, highlighted the significance of securing capital at this scale. He emphasized the company’s commitment to driving innovation in digital infrastructure alongside its customers.

The funding, sourced from undisclosed international investors, will be deployed through EcoDataCenter, a company under Areim’s portfolio. Established in 2019, EcoDataCenter designs, builds, and operates data centers focused on reducing carbon emissions and optimizing energy efficiency through renewable energy and advanced technology.

Areim and EcoDataCenter have collectively secured approximately €1.2 billion in funding over the past two years, marking a substantial commitment to sustainable data infrastructure.