The maturing stage of AI/momentum unwind; Inflation rates rolling; Earnings to offer a support

研报英文原文证据摘录

The maturing stage of AI/momentum unwind; Inflation rates rolling; Earnings to offer a support

Europe Equity Research

Europe First to Market 20 July 2026

Today’s Morning Meeting | Also Published Today | Key Changes | JPM Events | Upcoming Earnings

Today’s Morning Meeting

Equity Strategy (Mislav Matejka, CFA)

In the past few weeks, various AI groups had a challenging spell of performance. From last month’s high, Korea is down 25%,

SOX 20%, stocks such as Samsung, Micron and others anywhere between 20% and 50%. Mag-7 price relative is stabilizing of

late, but it is still lagging the market on the year. AI at risk baskets continue underperforming by 20%+ ytd. We are proponents

of rotation, and of broadening in 2H, we maintain medium-term concerns over the monetization of extreme hyperscalers’ capex

surge, and stay fundamentally bearish on Software, Business services and Media – AI cannibalization groups. Rotations and

momentum factor unwinds have in their initial stages tended to lead to increased overall market volatility. Having said that, we

do not expect prolonged market weakness on the back of these rotations. It is encouraging that despite 20%+ drawdowns

among many heavyweights, MXWO is so far holding within 1-2% of its all-time highs. Momentum factor has already lost a

chunk of ytd performance, with technical positioning becoming less problematic. We think that various AI groups should not be

falling in absolute terms for long, given likely continued strong earnings uplift, and increasing valuation support. In particular,

Semiconductors should soon start to find a bid. Our view is that fundamentals will likely remain constructive, as meaningful

supply additions are not due before 2028, so it would be too early at present to price in an inflection.