The market experienced a sharp reversal driven by weak guidance from AVGO, putting pressure on AI-related Momentum stocks. While earnings revisions remain high, valuations are extended and margin pressure is mounting in Europe.
Key Takeaways
- 1.The Momentum factor, particularly AI Momentum, has come under significant pressure following weaker-than-expected guidance from Broadcom (AVGO).
- 2.Global earnings revisions remain positive, supported by AI capex, though cyclically adjusted valuations in the US are at their highest levels since 2000.
- 3.European margins show signs of compression, leading to downward earnings revisions and a breakdown in the protective value usually provided by Quality factors.
Table of Contents
- Few Charts
- Notice to Australian Investors
- Additional Disclaimers
- Notice to Brazilian Investors
- Notice to Investors in the European Economic Area
- Notice to Investors in Korea
- Notice to Investors in Japan
- Notice to Investors in New Zealand
- Notice to Investors in Switzerland
Access the Full Report
Get unlimited access to institutional research reports with a 14-day free trial.
Authors
Jacob Malmstrom
Securities
AVGO
Themes
AI MomentumPricing Power ReassessmentMargin Compression
Regions
EuropeAsia PacificUnited StatesJapan