Live Markets: Buy the dip on Europe's AI winners, says MS

Wolters Kluwer

08/08/2024 10:26

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      STOXX 600 down 0.9%
    

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      Volatility above 23
    

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      Tech leads fallers
    

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      Some UK earnings please
    

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      Wall St futures soft
    

  
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    BUY THE DIP ON EUROPE'S AI WINNERS, SAYS MS
    AI beneficiaries were the first to feel the pain in the
recent market sell-off, but Morgan Stanley equity analysts
expect them to be the first to recover.
    "The recent share price weakness of the main AI plays, in
particular among global semiconductors and the Mag-7 in the US,
has triggered debate around whether the AI/tech trade is past
its peak," they wrote in a Thursday note. 
    But when the MS team compares the current environment to a
similar "growth scare" scenario in the mid-90s, and considers
the fundamentals, they arrive at the conclusion that European
semiconductors and other AI winners are experiencing a tactical
correction and should make new highs in the coming months.
    For that reason they stay overweight on semis and software.
    MS's list of fifteen winning stocks spans five categories;
semiconductor equipment, European data centre plays, information
services/proprietary data stocks, software vendors and
healthcare names with notable AI exposure. 
    They are BE Semiconductor  BESI.AS , ASML  ASML.AS , ASM
International  ASMI.AS , RELX  REL.L , Wolters Kluwer
 WLSNc.AS , Experian  EXPN.L , London Stock Exchange  LSEG.L ,
Legrand  LEGD.PA , SEGRO  SGRO.L , Schneider Electric  SCHN.PA ,
Fortum Oyj  FORTUM.HE , SAP  SAPG.DE , Sage  SGE.L , Siemens
Healthineers  SHLG.DE  and Merck KGaA  MRCG.DE .
    According to LSEG Workspace, these 15 stocks are down on
average about 7.5% in the last four weeks. The likes of ASML
 ASML.AS  and BE Semiconductor  BESI.AS  stand out, being down a
respective 22.9% and 34% since July 11. 
    
    (Lucy Raitano)
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    EARLIER ON LIVE MARKETS:
    THAT UNWIND FEELING CLICK HERE
    DOWN (SLIGHTLY) WE GO AGAIN... CLICK HERE
    NO LET UP IN VOLATILITY CLICK HERE