Turmoil in the IT sector
The AEX has shown a healthy rise of around 1.6% this week. At the time of writing, the index stands at around 1,077 points. This means that it is performing slightly less well than the broad-based STOXX Europe 600, which stands at around 650 points, after increasing by 2.3% this week.
The list of stocks with the best gains in the AEX index is led by ArcelorMittal (+6.7%), followed by CVC (+5.7%), Magnum (+5%), ABN AMRO (+4.9%) and DSM (+4.3%). Only seven of the thirty AEX companies recorded a negative weekly return. The stocks with the biggest declines were KPN (-6.3%), BE Semiconductors (-5.2%) and SBM Offshore (-1.6%). The quarterly results season has not yet begun, so share-price movements among AEX companies are primarily driven by macroeconomic data, interest rate expectations and changes to analyst valuations.
This week, we saw very volatile price movements among AEX stocks, driven in particular by geopolitical developments and continued turmoil in the technology sector. Overall, investor sentiment improved as tensions in the Middle East eased and macroeconomic data pointed to a resilient global economy.
Later in the week, enthusiasm for AI investments waned (see also ‘Strong second quarter’). Concerns arose that some major technology companies might be investing too heavily in data centre capacity. Reports that Meta intends to open up its cloud infrastructure to external parties led to a sharp sell-off in semiconductor shares, including BE Semiconductors. ASML, too, had to relinquish its healthy share-price gains seen at the start of the week.
Following a week packed with developments in the fields of geopolitics and AI investment, all eyes will once again be on the upcoming quarterly results season in the coming weeks. ASML will be one of the first major AEX companies to report. As well as these results, investors will also be keenly interested in management outlooks for the coming quarters during these uncertain times.