Equity Focus - February 2026

Edmund Shing, Global Chief Investment Officer, Stephan Kemper, Chief Investment Strategist, and Alain Gérard, Senior Investment Advisor, BNP Paribas Wealth Management
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Summary

1. Who needs to be afraid? – 2026 seems to mark the turning point of how the market perceives AI. Rising Capex is no longer a sufficient condition for outperformance.

2. SaaSmageddon and beyond – We note a rising focus on AI disruption risks. Software stocks have been at the center of that focus. Beyond software, stocks in data-intensive industries including media, education, and business services, as well as some asset managers have been caught in the crosshairs as well. AI disruption risk is currently top of investors mind, leading to a “sell first, ask questions later” environment.

3. How to play this – While we think that the concerns about the ability of hyperscalers to monetize their AI investments have a certain degree of credibility, we think that the AI disruption fears are in many cases overblown.

4. Europe – As dispersion is increasing, we reiterate our call to be selective in Europe, favoring domestically geared exposure benefitting from increasing investments to foster Europe's autonomy

5. Acropolis Now – Greece has transitioned from the center of the Eurozone crisis to what we now consider one of the most interesting equity transformation stories in the market today

6. Earnings Season – >70% of US companies beat expectations at the earnings level. S&P 500 Q4-2025 EPS is currently growing at +12% y/y. In Europe, > 50% of companies beat expectations at earnings level. European Stoxx 600 EPS is beating expectations by 2%, i.e. Stoxx 600 EPS should barely grow in Q4-2025.

7. Sector changes – we are becoming more cyclical as we upgrade US industrials to OW and global energy stocks. to neutral.

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