Ideas to Diversify & Broaden

Research evidence excerpt

Ideas to Diversify & Broaden

Idea

July 2, 2026 05:43 PM GMT

Morgan Stanley & Co. International plc+MEuropean Equity Strategy | Europe Marina Zavolock

Equity Strategist

Ideas to Diversify & Broaden Marina.Zavolock@morganstanley.comPaul R Walsh +44 20 7425-2318

EMEA Head of Research Product

Paul.R.Walsh@morganstanley.com +44 20 7425-4182

Our recent feedback points to rising investor appetite to Morgan Stanley Europe S.E., Madrid Branch+

broaden exposure amid concentrated positioning & increased Alvaro Serrano

volatility in the AI capex complex. While we continue to like EquityAlvaro.Serrano@morganstanley.comAnalyst +44 20 7425-6942

direct AI capex beneficiaries (OW Semis, CapGoods), we believe Morgan Stanley & Co. International plc+

a dual approach of AI capex + steady (ex AI) compounders is Robert Pulleyn

prudent to reduce portfolio volatility. Our analysts present EquityRobert.Pulleyn@morganstanley.comAnalyst and Commodity Strategist +44 20 7425-4388

investment cases for 30 broadening stock ideas in Europe. Cedar Ekblom, CFA

Equity Analyst

Cedar.Ekblom@morganstanley.com +44 20 7425-4623

Key Takeaways Emily A Woods

70% of YTD MSCI Europe performance has been driven by the AI capex complex - Emily.Woods@morganstanley.com +44 20 7425-1597

Semis, select CapGoods, M&M/copper equities, & Tech Hardware. 68% of Regiane Yamanari

European LO funds are OW Semis as per our latest positioning data. Equity Strategist

Regiane.Yamanari@morganstanley.com +44 20 7677-4652

However, broadening has also steadily begun, driven by the Iran-US MoU / lower Ross Law, CFA

oil prices, increased volatility in AI capex plays on concentrated positioning, Ross.Law@morganstanley.com +44 20 7677-0560

seasonal AI cycle concerns, & broadening fundamental strength beyond AI. Max R Yates