European equities notched fresh highs early in the week, but late-week softness in tech and chips reintroduced two-way risk.
Constructive research argued the rally has legs: broadening leadership beyond tech, roughly 11% forward EPS growth, cooler inflation, and relief from lower oil post-Hormuz. Industrials, real estate, utilities, healthcare, staples and EU mid-caps were flagged as H2 favourites, with utilities backed by electrification and grid spend. ASML featured heavily after a strong beat and a lifted 2026 revenue guide to €43–45bn on AI-chip demand, alongside positive takes on BE Semiconductor and Wärtsilä as picks-and-shovels AI plays. Corporate news added fuel: Schaeffler flagged higher margins, Delivery Hero entered advanced talks with Uber near €40/share, SMA Solar and Hapag-Lloyd raised guidance.
Not everyone agreed. A contrarian view called European equities "priced to perfection," lacking earnings growth and AI leadership. By Friday, commentary turned cautious on the DAX and German chip names including Infineon, warning of a break below 24,700 on global tech weakness.