Europe's AI chip suppliers drive record stock market rally — The Debate
Semiconductor and tech infrastructure firms lead the surge as the STOXX Europe 600 and EURO STOXX 50 hit all-time highs.
European equities are scaling new peaks, with the STOXX Europe 600 closing at a record 657 points on Wednesday, extending its winning streak to a third session. The EURO STOXX 50, tracking the euro area's largest companies, also set a fresh all-time high, capping a 10% gain since January. Germany's DAX, France's CAC 40 and Italy's FTSE MIB all followed suit, each breaking new ground.
This rally is not led by the usual suspects. Luxury brands, pharma giants and even banks have been outpaced by a new cohort: the European firms supplying the backbone of the global artificial intelligence boom. Manufacturers of semiconductor wafers, chip-testing gear and advanced substrates now sit at the top of the leaderboard, a shift that underscores how the continent's industrial base is pivoting toward high-tech infrastructure.
A mix of geopolitical and economic tailwinds is fuelling the climb. Easing tensions between Washington and Tehran have pushed oil prices lower, reducing inflation pressure on Europe's manufacturers and airlines. Meanwhile, Eurostat data showed the eurozone economy grew 0.4% in Q2, double expectations, with annual growth hitting 1.0%. Corporate earnings have also beaten forecasts, while demand for AI-related technology has turned a handful of European suppliers into global standouts.
Notably, the surge reflects a broader realignment in European industry. As the US and Asia race ahead in AI, Europe's strength lies in the niche but critical components that power the sector. This positions the continent as a key, if often overlooked, player in the global tech supply chain.
The 10 best-performing STOXX Europe 600 stocks this year, ranked by share price gains through 5 August, are dominated by tech and industrial names:
10. ArcelorMittal (+65.3%)
Europe's largest steelmaker has benefited from EU import quotas that curbed cheaper foreign competition, alongside a share buyback programme. Second-quarter revenue hit $16.5 billion, with underlying profit of $2.1 billion its strongest in three years.
9. Raiffeisen Bank International (+67.6%)
The Austrian lender's first-half profit, excluding Russia, rose 25% to €708 million, driven by higher interest rates and resilient demand in Central and Eastern Europe. Management raised its full-year net interest income forecast to €4.4-4.5 billion.
8. Saipem (+75.8%)
The Italian engineering group's order book swelled to a record €29.9 billion, despite trimming guidance for conflict-related costs. First-half revenue reached €7.35 billion, with operating profit up 9.4%.
7. STMicroelectronics (+105.7%)
The Franco-Italian chipmaker's second-quarter revenue climbed 26% to $3.49 billion, returning to operating profit. Demand for AI-related semiconductors has driven its shares more than 100% higher.
6. AIXTRON (+121.0%)
The German equipment maker saw second-quarter orders jump 81% to €214.5 million, fueled by demand for photonics and power-chip tools. It reaffirmed full-year revenue guidance of €560 million.
5. Technoprobe (+135.1%)
Few may know this Italian firm, but its chip-testing technology is critical to advanced semiconductors. After a record first quarter, it raised its 2026 sales forecast to €950-1.05 billion.
4. ams-OSRAM (+136.2%)
The Austrian sensor specialist's second-quarter revenue hit €805 million, the top of its guidance range. Progress in microLED technology for AR glasses and the sale of a non-core division have bolstered its balance sheet.
3. Tullow Oil (+136.4%)
The only energy firm in the top 10, Tullow Oil more than doubled its 2026 free cash flow forecast to $170-250 million, though its shares dipped Wednesday as oil prices fell on Middle East de-escalation hopes.
2. AT&S (+343.5%)
This Austrian firm produces advanced substrates for AI processors. Its shares have soared on forecasts of 30-35% revenue growth this year, driven by data centre investment.
1. Soitec (+414.5%)
The French semiconductor materials specialist leads the pack, with shares up over 400%. Despite a 34% annual revenue dip, its photonics business topped $100 million for the first time, and free cash flow hit €63 million. Management expects a return to growth, cementing its role in the AI supply chain.