1. HSBC joins the rotation club and puts Europe on “overweight”.

"The growth picture in Europe may well look worse currently. But that’s well-accepted now and more of a description of H1 than an outlook for H2. In other words, the bar to beat for Europe is much lower in H2".
“German stimulus is set to ramp up…investors have become skeptical on it, offering a good entry point.”
Below: Positioning in European stocks is back at the lows.

2. Alibaba shares are gaining on AI optimism.

Alibaba (BABA) shares ripped higher on Wednesday following an interim corporate update that signaled robust AI growth and clear signs of operational stabilization.
According to data from Frost & Sullivan, Alibaba Cloud now commands a 40.1% share of China’s full-stack artificial intelligence cloud ecosystem.
Despite today’s rally, however, Alibaba stock remains down about 25% versus its price at the start of this year.
The consensus rating on Alibaba sits at “Strong Buy,” with the mean price target of about $182 indicating potential upside of more than 65% from current levels.

3. STMicroelectronics: A European space beneficiary.

LEO and space sales expected to grow at a 32% CAGR from FY25 to FY28 and management updated guidance to “well above $3bn cumulative sales over the next 3 years”.
Buy on pullback.

4. Buy Orange.

Orange shares are -17% from their mid-May record highs on satellite disruption fears.
Satellite risk seems heavily over-discounted as we don’t believe it will become a structural competitive threat to the global wireless industry.
Orange trades on just 10x PE and a 12% EFCF yield.
Below: Orange is oversold.

5. ChatGPT (OpenAI) versus Claude (Anthropic).

OpenAI which, like Anthropic, is pursuing an IPO that could value it above $1 trillion, is more of a mass-market pIayer. While Anthropic gets almost all of its revenue from corporate customers and is the market-share leader in that area, OpenAI caters to a larger swath of users. OpenAI’s ChatGPT shot to more than a billion monthly active users in May, according to Sensor Tower, well above any other competitor and multiples of Anthropic’s user base.

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