FRANKFURT (dpa-AFX) - Negative analyst commentary from UBS put pressure on shares within the United Internet group on Tuesday. The Swiss investment bank withdrew its buy recommendations for both subsidiaries of the mobile and internet conglomerate, causing Ionos shares to drop by eight percent and those of 1&1 by 4.4 percent. As a result, the parent company's stock lost 4.6 percent of its value.

The recent performance of 1&1 and United Internet shares had been more positive in recent months, which partly explains the somewhat smaller declines on Tuesday. However, shares of web hosting subsidiary Ionos remain a major concern for investors, with the stock continuing its downward slide to its lowest level in nearly a year. Since their August peak, Ionos shares have lost over 40 percent of their value, a development UBS analyst Polo Tang on Tuesday attributed to concerns about disruptive impacts from artificial intelligence solutions.

Regarding Ionos, Tang stated he "does not expect a reassuring trend in the short term." While the 2026 targets indicate accelerated growth, he believes this is unlikely to dispel current fears that the company is lagging behind in the AI sector. Many investors worry that the rise of AI-powered tools could render Ionos's solutions obsolete.

Driven by a scaled-back expansion of its own mobile network, 1&1 recently hit its highest level since 2021, which Tang cited as a reason for his downgrade to "Neutral." While a merger with another German network operator remains an option, it is not currently on the table. Further restrictions on funds for network expansion would be positive for 1&1's cash flow, but such a move is not expected in the immediate future.

Among the three group stocks, analyst Tang maintained his buy recommendation only for United Internet itself, arguing that the parent company remains the most cost-effective way for investors to gain exposure to the group. The valuations of Ionos and 1&1, he noted, imply a negative equity value for the rest of the company. Tang does not believe the end of the road has been reached, even though United shares rose to their highest level since 2022 in January, buoyed by momentum from 1&1./tih/jsl/mis