DWS argues that July’s sharp correction in technology — particularly semiconductors — may have created a more attractive entry point. Despite the volatility, it upgraded the technology sector and software & services, arguing that the AI investment cycle still has considerable runway.
- Some semiconductor stocks have fallen as much as 60%, which DWS believes may represent an overreaction amplified by leveraged selling.
- The semiconductor supply shortage could persist for several more quarters as supply expands only gradually while demand remains strong.
- DWS does not believe the AI boom is over. Data-centre construction should continue rapidly, although hyperscalers now face greater pressure to demonstrate free-cash-flow generation and actual AI monetisation.
- There are still yellow flags: data-centre capex could peak in 2027–28, financing conditions are tightening, China is advancing rapidly in AI and semiconductors, and political resistance to new data centres could grow.
DWS also upgraded oil from Neutral to +1, citing renewed geopolitical risks involving Iran, the Red Sea, the Houthis and Russia.
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