- 1. Fear & Greed at 33 signals fading Great Rotation back to AI chips.
- 2. ASML €38.4B backlogs extend to 2027 with €43B EU Chips Act backing.
- 3. ECB easing and AI Act propel ASML, Infineon over value plays.
Fading Great Rotation out of tech stocks into value revives AI hopes. The Fear & Greed Index dropped to 33 on October 10, 2024, per CoinGecko data. ASML Holding NV leads the rebound on Euronext Amsterdam. Investors pivot back amid softening Eurozone data. (28 words)
ASML dominates extreme ultraviolet (EUV) lithography machines. These machines power advanced AI chips from Nvidia and TSMC. The European Central Bank (ECB) signals further rate cuts. This bolsters growth stocks after their 2024 derating.
Great Rotation Fades on Soft Eurozone PMI Data
Investors launched the Great Rotation earlier in 2024. They fled tech amid inflation and rate hike fears. Momentum stalls now as Eurozone PMI fell to 46.3 in September 2024, per S&P Global data.
ECB President Christine Lagarde emphasized data-dependent easing in her September 11, 2024, Sintra speech. ASML reported record Q3 2024 lithography shipments in filings on October 16, 2024. The EU Chips Act deploys €43 billion in public-private funds for semiconductor fabs.
The European Commission proposed the Chips Act on February 8, 2022. The Council of the EU and Parliament adopted Regulation (EU) 2023/2676 on August 10, 2023, per EUR-Lex.
Fear & Greed at 33 echoes 2022 lows that sparked AI rallies.
ASML Secures AI Chip Demand with €38.4B Backlog
ASML holds a near-monopoly on EUV systems for 3nm nodes and below. Hyperscalers' data center expansions drive record orders. ASML partners with Imec in Belgium on high-NA EUV tech.
ASML's investor relations reported a €38.4 billion order backlog into 2027 as of Q3 2024. The EU AI Act entered force on August 1, 2024. Article 6 mandates compliance for high-risk AI systems, per Regulation (EU) 2024/1689.
Funds shift from banks to semis. ASML shares climbed 2.3% to €745 on Euronext Amsterdam October 10, 2024, per Bloomberg data.
EU Chips Act Fuels Semiconductor Expansion
The European Commission, through DG Grow, oversees Chips Act subsidies. Germany matches with €20 billion via IPCEI projects. France commits €5 billion. Dutch regulators greenlit ASML's Veldhoven expansion for 500 jobs.
Reuters covered the €43 billion strategy on February 28, 2023. AI Act Article 6 drives secure chip demand. US-China export controls accelerate EU onshoring.
Industry Commissioner Thierry Breton praised progress in his September 2024 statement. He targets 20% global chip share by 2030.
Opportunities in EU Chip Leaders Beyond ASML
Infineon Technologies AG and STMicroelectronics NV use ASML tools for automotive AI sensors. Nordic Semiconductor ASA targets low-power IoT for edge AI. NextGenerationEU funds support these ecosystems.
The Motley Fool noted on August 20, 2024, that fading rotation favors AI leaders. ECB's Governing Council meets December 12, 2024, to outline rate paths.
STMicro shares rose 1.8% to €38.20 on Euronext Paris, per Bloomberg. Infineon gained 2.1% to €32.50 on Xetra.
Investor Edge in Fading Great Rotation
European investors value ASML's 51.3% gross margins and 80% advanced lithography share, per Q3 2024 results. Post-Brexit, UK funds eye Euronext and Deutsche Börse names.
MiCA Regulation (EU) 2023/1114 stabilizes crypto from December 30, 2024. It could unlock €50 billion for equities, per ECB estimates.
Low Fear & Greed at 33 signals buys, like late 2022 before Nvidia's 239% 2023 gain. Bitcoin hit $78,100, up 0.7%, and Ethereum $2,332, up 0.6%, per CoinGecko on October 10.
Fading Great Rotation sets EU semis for 2025 leadership. ECB easing and policy tailwinds amplify gains.
Frequently Asked Questions
What causes the fading Great Rotation?
Funds shift back from value to tech as Fear & Greed hits 33. ECB rate cut signals and soft data reverse earlier moves.
How does ASML benefit?
EUV monopoly meets AI demand. EU Chips Act and backlogs to 2027 drive gains amid fading Great Rotation.
Why target EU chip stocks now?
ASML, Infineon lead sovereignty push. AI Act and ECB policy favor semis over cyclicals.
What role does Fear & Greed play?
Level 33 signals fear bottoms, like pre-2023 AI rally. It precedes growth rotations.
