TPICAP Midcap announced Thursday it has lowered its price target on OVH shares from EUR7.4 to EUR6.5, citing ongoing uncertainty surrounding the sovereign cloud theme in the stock market.

"Between regulatory ambiguity and slow certification processes, the European sovereign cloud is struggling to find its footing," the investment bank noted in a research report released in the morning.

The brokerage, which maintains a 'sell' recommendation on the stock, emphasized that the French 'trusted cloud' doctrine sets high standards, but also pointed out that European harmonization is lagging behind, with Brussels implementing the 'Cloud Sovereignty Framework' and Berlin introducing the 'Deutschland-Stack.'

As a result, TPICAP notes that OVH continues to be penalized by a less comprehensive offering and limited resources when compared to 'hyperscalers,' who are simultaneously ramping up their capital expenditures.

"And for the first time, two growth drivers are stalling simultaneously," the firm adds, warning that fiscal year 2025/2026 is shaping up to be under triple pressure: with a slowdown in private cloud, the absence of sovereign contract signings before 2026/2027, and strategic initiatives unlikely to yield results before 2026/2027. This has led TPICAP to adjust its scenario accordingly.