The European technology sector saw strong growth in Q4, with MSCI Europe’s tech division earnings rising 5.5%, far exceeding the 0.5% forecast.

ASML led the surge, reporting strong bookings that doubled analyst expectations, driven by growing demand for its chipmaking equipment amid rising AI investments.

Nokia also performed well, with improvements in its 5G networks and infrastructure units, expecting higher data center demand.

Meanwhile, STMicroelectronics and Infineon Technologies struggled due to weak demand in the automotive and industrial markets and limited AI exposure.

Semiconductor equipment makers like ASML outperformed chip producers in uncertain market conditions.

SAP also posted a 29% increase in its cloud backlog and raised its 2025 revenue forecast, citing AI-driven business growth.

Despite the gains, risks remain. Analysts warn of potential US tariffs, declining EV component demand, and economic challenges in Europe and China.

While 2025 earnings estimates have improved, concerns about long-term growth persist.