Cordiant Digital Infrastructure Ltd (LSE:CORD) has an eye on a key artificial intelligence opportunity that may be an overlooked valuation sleeper.
Stifel, in a research note, points to the upcoming 26MW Prague Gateway project, a next-generation AI gigafactory, which could begin construction soon.
Cordiant portfolio company CRA holds permits to build a 26 MW data centre on its site in the Czech capital.
The location benefits from strong transport links, a nearby substation, and multiple fibre optic connections.
A contract has been awarded to begin site preparation. The company is also exploring plans to expand the Prague Gateway project to a 100 MW facility after the EU set out plans to become a leader in artificial intelligence.
Though still at an early stage, this bid represents an exciting potential growth catalyst, Stifel notes.
Its analysis also looks at the upsurge in streaming in Poland and the Czech Republic, which would inevitably impact Cordiant's digital infrastructure there.
That said, the two countries are well behind similar trends in the UK. "For now, we see the portfolio as well-placed for further growth," Stifel says.
In the note, it also highlights management’s strong acquisition discipline, with the successful turnaround of BT Ireland demonstrating the team’s ability to create value from acquisitions.
With capital available for further bolt-on deals, ongoing insider buying, and a possible narrowing of the fund’s 27% discount, the broker maintains its 'positive' rating on Cordiant.
In late afternoon trading, the shares were static at 95p.