Our Equity Top Pick List
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Could the momentum return in the semiconductors?
The semiconductor sector has had a challenging quarter, with its performance in recent months lagging behind improvements in underlying fundamentals, even as AI-driven demand remained exceptionally strong. The accelerating adoption of AI by enterprises and the proliferation of AI agents are significantly increasing the demand for computing capacity, which points to a further surge in cloud services and data center investments. Given current supply constraints, record-high backlogs, and higher-than-expected investment needs, we expect further upward revisions to earnings forecasts in the semiconductor industry. Nevertheless, the sector’s valuation appears favorable from a historical perspective, which, in our view, could result in a more attractive risk-return profile in the coming months.
Commodities - Technical Analysis
Gold and silver continued their correction, and the movement of precious metals remains characterized by a mild downtrend. Oil’s correction is slowly approaching its first significant support level, so the market’s reaction to this zone will be crucial. Natural gas prices have remained above the upward trend line for now, though the technical picture currently does not suggest a significant shift. Although copper’s upward trend changed a week ago, the price has reached a new high, so a trend reversal or a clear break in the trend has yet to materialize. Wheat and corn prices may continue to move within a correction phase.
We have updated our Equity Top Pick List to reflect the events of the past quarter. The list includes those stocks, typically US and European ones, that we consider to be proper investment choices from a fundamental point of view. It can provide a starting point for building a sector-diversified equity exposure in portfolios, but can also be used as a watch list. Technical analysis should be used to time / determine the specific investment decision.
Given the fundamental selection process, the stocks on the list should be treated as longer-term investment opportunities, but are reviewed on a quarterly basis to check whether the stock is on track with our original expectations or whether there is a sector peer with a better risk/return profile. We note that our latest Investment Outlook recommends neutral overall exposure to the equity asset class.
We have recently removed Novo Nordisk from our list as the company presented a disappointing strategy for the coming years at its Capital Markets Day. At the same time, we have added two new names to the list, specifically Südzucker, one of the world's largest sugar producers, and Take-Two, a leading player in the video game market, which will publish GTA 6 in November, one of the most anticipated video games in history. The latest analyses of the companies still on our Equity Top Pick List are available at the links below:
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