According to external sources, the European stock market performed better this year than many investors expected. Despite the long-term market preference for United States equities and the fact that Europe is often labelled as having slow growth and insufficient technological content, the Pan-European Stoxx 600 index rose by about 10 per cent during the year, just below the 13.5 per cent mark of 500 for the same period.
Goldman Sachs called the market too monolithic.
The CNBC cites a report from Goldman Sachs dated 10 August that investors ' perceptions of European markets are not entirely consistent with actual performance. According to Goldman Sachs, since 2022, the European banking unit has performed significantly better than the United States “Scientific Seven”; and since early 2025, European stock markets have managed to win 500 for their overall performance, even though they have experienced tariff shocks and energy supply crises.
Goldman Sachs also refuted the view that “China’s competition is a total repression of European enterprises”. The report states that the stock market structure is not equivalent to that of the real economy, and that high-priority finance, medicine, technology, energy, utilities, telecommunications and aerospace and defence segments in European markets are not particularly exposed to competition for low-cost goods in China.
It's obvious that the car's being dragged.
The European automobile industry remains the weakest link in the market. Over the past few years, the industry has been under pressure to slow down the demand for electric vehicles, to gain a share from Chinese companies and to raise the cost of financing, and sales have not recovered to pre-epidemic levels.
The data show that the Stoxx car index has fallen by 16 per cent since this year. Of these, Volkswagen stock prices fell by 27.6 per cent and Stellantis fell by 51.9 per cent. According to Goldman Sachs, however, car plates account for only about 1 per cent of the total market value of the European stock market and therefore have a limited burden on the overall index.
FABA: Europe is more like AI beneficiaries
BNPAM believes that Europe is not necessarily at the heart of AI ' s technology development, but is more likely to benefit from AI applications and from traditional industries such as automobiles.
According to Sophie Huynh, manager and strategist of the Farba portfolio, the value of the deep segments of Europe is already very low, and the market has not yet fully discussed their potential upward space. She also stated that good consumption-related gains in the United States had been priced to a greater extent by the market, while economic dynamism in Europe had just begun to improve.
Goldman Sachs also acknowledged that Europe lags behind the United States in data centre construction and forward model development, which could affect long-term productivity and growth. At the same time, however, the Bank believes that Europe is not deeply involved in AI transactions, and that it also provides a buffer to local markets in the face of AI’s overvalued or Chinese competition risks.