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A small number of European AI stocks have posted huge gains so far this year, as investors hunt for ways to ride a global spending boom in a continent often derided for its lack of large and successful technology companies.
The top four performers in the region-wide Stoxx Europe 600 index this year are chipmaker STMicroelectronics, which has more than doubled; semiconductor equipment manufacturers Aixtron and BE Semiconductor Industries, up 168 per cent and 87 per cent respectively; and Nokia, which is up nearly 100 per cent and provides hardware connecting cloud services and data centres.
The gains show US and Asian AI fervour has spread to Europe, say analysts, with investors keen to find the next AI winners in a market that for years has lagged far behind Wall Street’s tech-driven rally.
“Whoever is investing in Europe is desperate to get a claim on this AI trade,” said Emmanuel Cau, head of European equity strategy at Barclays, pointing to a “gold rush” in the sector.
“The fact is Europe is a small market and there are not millions of AI winners,” he added. “So anything that is part of it is doing very well.”
The Stoxx Europe Total Market Semiconductors index is up about 74 per cent this year, while the broad Stoxx Europe 600 is up roughly 2 per cent.
“I think that the first leg of this AI trade was purely about US hyperscalers, and I think that it’s natural as that rally has gotten legs that investors have started to look outside of the US,” said Kasper Elmgreen, chief investment officer for fixed income and equities at Nordea Asset Management.
He added that investors’ focus in Europe had shifted away from the “Granolas” — a term coined by Goldman Sachs to describe 11 large European stocks focused on healthcare and luxury consumption — to the continent’s push for so-called strategic autonomy, including in tech.
“Those [Granolas] were the only names you really wanted to own in Europe. That has changed,” said Elmgreen. “There’s a theme around Europe of the structural need for strategic autonomy.”
While the Netherlands’ ASML remains the region’s biggest tech stock, Elmgreen said some smaller stocks had performed well this year as investors searched for companies making the “picks and shovels” needed for the AI boom.
France’s Soitec — a specialist in silicon-on-insulator wafers that help to reduce chip power consumption — has risen more than fivefold since the end of last year. The dramatic upturn in fortunes of the company, based outside Grenoble, came after its share price had tumbled 90 per cent by early 2025 from its high in November 2021. However, hedge funds including Two Sigma have built total disclosed shorts — bets on falling prices — of about 4.5 per cent against Soitec, according to data group Breakout Point.
Another French company based near Grenoble, chip designer Kalray, has surged more than fivefold. France’s Riber, which makes equipment used to add layers of atoms on to semiconductor wafers, has more than tripled in price this year.
A lack of opportunities compared with the US meant that money in Europe was increasingly chasing “critical suppliers . . . in some kind of niche”, said Roland Kaloyan, head of European equity strategy at Société Générale.
Electrification and utilities stocks have also seen gains from investors searching for potential AI upside.
“The way the market has played the AI story through European markets the last few years is through the energy story and electrical components,” Kayolan said.
While underperforming the top AI bets, Prysmian, a specialist in optical fibres and electrical cables, is up 71 per cent this year while Siemens Energy has risen 43 per cent.
However, some in the market are growing cautious. Kaloyan said he believed the sector was “quite expensive”, while Cau at Barclays pointed to crowding in some stocks.
STMicroelectronics, for instance, is on a forward price-to-earnings ratio of about 37 times, while Aixtron is on 47 times, according to Bloomberg.
“It’s obvious that you need more selectivity now than you did six months ago,” Elmgreen acknowledged. “But I think there are still really good opportunities.”
