AI Wins in Europe Too

European equities are underperforming broadly due to the Iran shock and Strait of Hormuz closure, but specific AI-focused baskets are matching Nasdaq returns. While defence and banks face cyclical pressure, European AI 'compute' and 'infra' names remain strong performance drivers.

Key Takeaways

• 1.AI-related stocks are the primary engine of European equity growth, offsetting macro-driven underperformance caused by geopolitical tensions.
• 2.The 'Iran shock' and closure of the Strait of Hormuz has shifted European equities from outperformance to underperformance relative to the US.
• 3.Despite recent rotation away from defence stocks due to poor earnings and changing warfare dynamics, the long-term outlook for European defence remains bullish.

Table of Contents

• Europe Watch
• TAKING STOCK(S): AI WINS IN EUROPE, TOO!
• Disclaimer

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