Live Markets: More volatility (and opportunities) ahead for Europe's software sector

Capgemini SE

20/04/2026 10:34

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MORE VOLATILITY (AND OPPORTUNITIES) AHEAD FOR EUROPE'S SOFTWARE SECTOR

The software sector, in Europe and globally, has staged a decent recovery in the last week as equity markets rebounded more broadly from the recent Iran War-induced selloff.

The STOXX Europe Software Index .T9537P gained almost 10% in the latest week but remains lower by over 20% year-to-date as concerns mounted about disruption from AI.

Deutsche Bank believes the recovery has been a result of very negative positioning going into earnings season.

"While this is somewhat of a relief following the derating of the last months, we retain our selective approach and overall more cautious stance on the space," Deutsche Bank analyst Johannes Schaller and team say in a note.

     They believe that expected new AI model releases from OpenAI, Google and others represent headline risk to the sector, while geopolitical and macro headwinds from the war in Iran are likely to impact enterprise customer confidence.

That should adversely affect the outlooks but should also provide opportunities for the companies they cover.

"Against this backdrop, we expect volatility in Software & IT Services share prices to persist this year, offering great longer-term entry points in companies that are proactively transforming their business models around AI," Schaller and co. say.

Here, they believe SAP SAPG.DE in large-cap software and Capgemini  CAPP.PA in IT services are "moving in the right strategic direction."

(Samuel Indyk)

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FOR MONDAY'S OTHER LIVE MARKETS POSTS:

AIRLINES SKID, OIL STOCKS RALLY AS TRADERS MULL MIDEAST DEVELOPMENTS CLICK HERE

EUROPE BEFORE THE BELL: FUTURES SLIP AS IRAN CEASEFIRE NERVES RESURFACE CLICK HERE

MARKETS LIGHT ON VOLUME AND HIGH ON HOPES CLICK HERE

Crude oil prices https://reut.rs/3PtajyU