LONDON, 18 September 2026 — By Anthony Gill , EBM Newsdesk Analysis
European equities are starting Friday on a softer footing after a strong session on Thursday, but the underlying picture remains more interesting than the headline STOXX 600 move suggests. The pan-European index opened around 0.1 per cent lower, while Germany’s DAX slipped 0.4 per cent and the FTSE 100 fell 0.2 per cent. Technology and infrastructure names, however, continued to attract buyers, with ASML and Infineon among the stocks showing strength.
The question for investors is therefore not simply which shares are rising today, but which companies have a combination of strong businesses, visible demand and structural themes behind them. That distinction matters in a market dealing with higher interest rates, elevated oil prices and growing questions over the valuation of AI-related assets. EBM’s broader analysis of European stocks has highlighted how the region’s market is increasingly being driven by industrial investment, defence, energy and technology rather than simply consumer spending.
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Subscribe1. ASML — Netherlands
ASML remains Europe’s most important semiconductor company and one of the clearest beneficiaries of the global AI infrastructure boom. Its shares were among the stronger European technology names Thursday and the Dutch AEX was again supported by the chipmaker. More importantly, the fundamentals remain substantial: ASML reported €9.3bn of second-quarter sales and €2.9bn of net income, while raising its 2026 sales outlook to between €43bn and €45bn. EBM has previously examined why ASML’s orders keep climbing even as investors have become more nervous about the AI trade.
2. Siemens Energy — Germany
Siemens Energy sits at the intersection of two powerful investment themes: electricity demand and AI infrastructure. The company reported record orders, revenue and profitability in its latest quarter, while Siemens Gamesa returned to a positive quarterly result for the first time since 2022. The bigger story is the amount of electricity infrastructure required to support data centres, industrial electrification and Europe’s energy transition. EBM has previously identified power and AI as two of the defining forces reshaping European markets.
3. Schneider Electric — France
Schneider Electric is another beneficiary of the enormous investment required to power and cool the digital economy. Its second-quarter revenue rose 17 per cent organically to €11.5bn, while first-half revenue reached a record €21.2bn. Data centres remained a major source of demand, while energy management and industrial automation both recorded strong growth. The attraction is that Schneider is not simply an AI stock: it sells the electrical infrastructure required by the AI economy.
4. Siemens — Germany
Siemens offers another route into Europe’s industrial AI cycle. Its exposure spans automation, industrial software, electrification and digital infrastructure, giving it a much broader earnings base than a pure technology company. The company reported record third-quarter results in August and raised its outlook. EBM’s analysis of Europe’s new capital cycle identified Siemens as one of the companies benefiting from the migration of capital towards industrial technology.
5. Rolls-Royce — UK
Rolls-Royce has become one of Britain’s most closely watched industrial recovery stories. The company reported a 46 per cent rise in underlying operating profit to £2.5bn in the first half and raised its full-year guidance to £4.7bn-£4.9bn. Free cash flow guidance was also lifted to £3.8bn-£4bn. The business is benefiting not only from recovering civil aerospace activity but also from defence and power systems, including growing demand from data centres.
6. SAP — Germany
SAP remains one of Europe’s most important software companies and offers investors exposure to the enterprise side of the AI transition rather than the semiconductor supply chain. Its cloud business, business software and growing AI capabilities give it exposure to companies modernising their operations. EBM has previously included SAP among the European companies investors are watching. The attraction is the recurring nature of enterprise software revenue, although valuation remains an important consideration.
7. Rheinmetall — Germany
European defence spending has become a structural investment theme rather than a short-term reaction to geopolitical events. Rheinmetall is one of the clearest listed beneficiaries, with demand for ammunition, vehicles and air-defence systems supporting a major expansion in European defence manufacturing. EBM’s analysis of Europe’s defence spending examines how government commitments are creating longer-term order visibility across the sector. The principal risk is that exceptionally strong expectations are already reflected in many defence valuations.
8. Airbus — France
Airbus offers exposure to another long-duration European industrial theme: commercial aviation. The company’s enormous aircraft backlog provides visibility well beyond the current economic cycle, while global passenger demand continues to underpin airline fleet expansion. It also provides some diversification from the technology-heavy part of this list, although supply-chain constraints remain a recurring issue for the aerospace industry.
9. AstraZeneca — UK
AstraZeneca provides a very different proposition. Pharmaceutical demand is less directly tied to the economic cycle than industrial and technology spending, while the company’s extensive drug pipeline gives it multiple potential sources of future growth. In an environment where interest rates remain elevated and investors are questioning some high-growth valuations, defensive healthcare exposure can become increasingly relevant.
10. ABB — Switzerland
ABB completes the list because it sits directly in the middle of Europe’s industrial electrification story. The Swiss-Swedish engineering group has exposure to automation, robotics, electrification and power infrastructure — all areas requiring investment as factories become more automated and electricity demand rises. EBM has previously identified industrial automation as one of the major beneficiaries of Europe’s next investment cycle.
The bigger European trade
What links these companies is more important than their individual share-price movements. Europe is entering a period in which enormous amounts of capital are being directed towards AI infrastructure, electricity networks, automation, defence, semiconductors and industrial technology. That is creating a different stock market from the one Europe had several years ago.
There are risks. The Fed has just raised US interest rates again, oil remains above $100 a barrel and the market is increasingly questioning whether the enormous sums being spent on AI will generate adequate returns. Valuations therefore matter, particularly for companies where investors have already priced in years of exceptional growth.
But the underlying corporate investment cycle is difficult to ignore. ASML is expanding capacity because chipmakers continue to order equipment. Schneider is seeing record demand from data centres. Siemens Energy is benefiting from electricity investment. Rolls-Royce is converting its operational turnaround into higher profits and cash flow.
That does not make any of these stocks a guaranteed winner. It does, however, explain why they remain among the European companies most worth watching as the continent’s next investment cycle takes shape.
