Finance

Morgan Stanley Bullish on European AI Stocks

Aug 16, 2024 1 min read

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Morgan Stanley has identified the top 15 European AI stocks, highlighting companies benefiting from the AI market's growth. Among these, EDP, S.A. (OTC:ELCPF) is noted for its potential in the AI boom, ranking 14th on the list. Analysts predict that European semiconductor stocks are undergoing a tactical correction and may reach new highs in the coming months. A significant focus is on utility and power firms due to the high demand for data center space in Europe, which has exceeded the supply of new stock for the third consecutive year.

Infineon Technologies AG (OTC:IFNNY) is also recognized as a top AI stock, expected to achieve substantial earnings per share (EPS) and revenue growth over the next two fiscal years. Despite the US market's focus on sectors like semiconductors and biotechnology, European investors are gravitating towards established names in utilities, commodities, and professional data providers. These European AI stocks have performed strongly, returning close to 45% on average since January 2023, outpacing the MSCI Europe benchmark.

Additionally, companies such as SEGRO Plc (OTC:SEGXF) and RELX PLC (NYSE:RELX) have been spotlighted. SEGRO Plc ranks 7th and is planning significant future growth, while RELX PLC has reported robust revenue growth driven by AI-powered decision tools. The demand for data center space and AI technology is expected to continue driving growth in these sectors.

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