European stocks near record high on Siemens, CoreWeave AI optimism

Europe's benchmark STOXX 600 rose on Wednesday and was within touching distance of a record high, as upbeat forecasts ‌from Siemens Energy and US-based CoreWeave bolstered confidence in the AI trade, while inflation concerns tempered optimism. The pan-European index gained 0.2% to 660.06 points by 1025 GMT and was just a whisker away from surpassing the record high reached in August.

Germany's DAX outperformed regional peers, with Siemens Energy up 8.3% after ‌the AI equipment maker raised its expectations for profit margins in 2027 and announced plans to more than triple its dividend. Shares of ‌its peers Schneider Electric and Legrand gained 2.4% and 1.5%, respectively, while the broader tech sector added 2%.

Optimism around AI was especially boosted by neocloud company CoreWeave, which said it would become profitable on an adjusted basis in the first half of 2028. The company was at the centre of AI bubble fears that sparked a global market rout ⁠last week. "The ​current big uncertainty is will this ⁠entire AI-investment really be profitable? And not all of the AI companies will be profitable. So in the next two to three months we will be watching what the ⁠company representatives are telling us about their business," said Thomas Romig, chief investment officer, multi-asset at Assenagon.

Romig also said that in Europe he currently favours more defensive ​stocks including consumer staples and other value-oriented sectors such as banking and telecom. Sectors relatively less exposed to AI in Europe, however, lagged ⁠on Wednesday, while US tech-heavy Nasdaq futures jumped 1.8% on AI optimism.

The STOXX retail, food and beverage and media led declines. Czech-based ammunition and arms producer CSG tanked 18% after cutting ⁠its ​full-year operating margin forecast and weighed on the broader defence sector.

Vestas was among the STOXX 600's biggest decliners, falling 3% after reporting third-quarter operating profit below estimates. Investors were also keeping an eye on the interest rate outlook, a day after US inflation data came in hotter-than-expected and ⁠a chorus of hawkish commentary from Federal Reserve policymakers strengthened the case for another interest-rate hike next month.

A rebound in Brent crude prices following ⁠shipping attacks in the Strait of ⁠Hormuz also added to inflation concerns in energy-importing Europe. Traders see the European Central Bank leaving rates unchanged next month and potentially hiking next in February, LSEG-compiled data showed.

Bundesbank President Joachim Nagel said Europe's largest economy, Germany, was ‌recovering faster than ‌expected.