Wallstreet eagerly seeks AI giant abroad: What about Europe?

As artificial intelligence reshapes industries, economies, and politics worldwide, Wall Street’s keen eye is now turning beyond the borders of the United States in search of the next frontier of AI success. 

This shift in focus comes amongst a significant resurgence in emerging markets, with AI stocks spearheading a remarkable $1.9 trillion rebound this year, with industry giants like TSMC and SK Hynix accounting for a whopping 90%. 

Analysts see a 61% increase in earnings for emerging-market AI firms, compared to a 20% rise for US peers. 

What sets this AI surge apart is the diversity of investment strategies being pursued by major financial players: 

Goldman Sachs Asset Management is focusing on the manufacturers of AI supply-chain components, such as cooling systems and power supplies. JPMorgan Asset Management, on the other hand, is favoring traditional electronics manufacturers that are transitioning into AI leaders. Meanwhile, investment managers at Morgan Stanley are betting on players where AI is reshaping business models in non-tech sectors. 

The spotlight, however, remains on companies that were already technology leaders before the AI rally. TSMC and Hon Hai Precision Industry, better known as Foxconn Technology Group, stand out as prime examples of firms that have seamlessly integrated AI into their operations, solidifying their positions as frontrunners in the global AI race. 

Sources :The Edge

Despite the undeniable appeal of emerging markets, investors remain wary of potential pitfalls. The close ties between emerging markets and the US mean that any AI selloff in the US could echo across the globe. 

On the other side, if stock-market gains broaden, it is possible that other sectors could catch up, resulting in AI stocks falling behind. 

Yet, amidst the uncertainties, investors are increasingly turning to emerging markets as viable alternatives to overextended US tech stocks. As Morgan Stanley’s Managing director Jitania Kandhari said: “In emerging markets, they are seeing AI as an under-appreciated driver going forward, (…) There’s a lot of low-hanging fruit to juice there.” 

Wallstreet’s search of next AI giant coincides perfectly with “La villa Numeris”’s advocacy to create a European Ai giant. As we covered during our last LinkedIn post. 

European startups specializing in generative artificial intelligence have seen significant growth in recent months. According to a report published by Sequoia Capital on the European tech talent landscape, with nearly 200,000 engineers possessing some AI expertise, the continent hosts a significant talent pool. However, the driving force behind Europe’s AI revolution lies in a core group of approximately 43,000 dedicated specialists. It is estimated in the above-mentioned report that this group represents a per-capita concentration of AI experts that is 30% higher than in the U.S. and nearly triple that of China.  

 

This marks the dawn of a highly promising sector for both Europe entrepreneurs and investors. And qualifies Europe as an emerging market. Exactly what the US is looking for. 

This is, of course, very exciting news for Descartes & Mauss—it fuels our ambition, strengthens our vision, and reaffirms our commitment to driving AI innovation forward. As global investors look beyond traditional markets for the next wave of AI leaders, we see this as both an opportunity and a responsibility. It challenges us to push the boundaries of what’s possible, refine our solutions, and ensure that AI-driven strategy remains at the core of business transformation.

The stage is set for a new chapter in the ever-evolving saga of artificial intelligence. As Europe continues to gain recognition as a key player in the global AI landscape, we are proud to be at the forefront of this shift, helping businesses navigate complexity, make smarter decisions, and unlock new growth opportunities. The future of AI is being written now, and we are honored to play a role in shaping it.

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