European semiconductor stocks rally on rate-cut bets

Infineon shares have jumped sharply from around 46 euros in January to 71.68 euros on Monday, even after a recent pullback from a May peak above 78 euros. The stock remains well above its 200-day moving average of 58.94 euros, indicating the longer-term uptrend is intact despite a cooling in momentum. RSI readings around 51 suggest the stock is no longer overbought after the earlier surge, while the price has consolidated below its recent highs.

ASML has also recovered from a spring slump and was last quoted at 1,844.08 euros, up from 1,288.32 euros in early March. The Dutch equipment maker’s shares have climbed back above both their 50-day and 200-day moving averages, underscoring that investors continue to price in durable demand for advanced lithography tools even as short-term ordering patterns remain uneven. The stock’s RSI near 68 shows the rebound has regained strength.

The broader move reflects a market view that rate cuts could do more than simply support valuations. For chip equipment suppliers such as ASML and Applied Materials, cheaper financing can help large customers keep spending on fabs and process upgrades. For analog and power-chip makers like Infineon, it can help stabilize industrial and automotive end demand, which has been squeezed by sluggish growth and cautious inventory management.

Applied Materials has been even more volatile, falling to 507.18 dollars from a June peak above 723 dollars. That pullback shows investors remain selective and are not treating rate-cut hopes as a blanket repricing of the sector. The recent selloff also suggests that, for now, the market is rewarding companies seen as best positioned for structural AI and advanced-manufacturing demand, while punishing those more exposed to cyclical swings.

There is also a valuation and positioning angle. The Adalytica AI gauge showed extreme fear at 11, highlighting how quickly sentiment has swung in the technology complex. In that environment, any sign of easier policy can trigger a sharp re-rating in rate-sensitive growth shares, particularly in Europe where semiconductor stocks often trade with lower liquidity than their US peers.

Bullish investors argue that falling borrowing costs will widen the financing window for capital spending and help convert AI enthusiasm into actual equipment orders. Bears counter that the rally may be running ahead of fundamentals, especially if global industrial demand remains sluggish or if customers delay purchases after a strong run in chip stocks.

For investors, the key question is whether lower rates become a durable tailwind for orders and margins, or just another short-term factor behind an already crowded trade. The next catalyst will be whether central banks confirm an easing path and whether semiconductor companies translate the improved backdrop into clearer guidance on bookings, capex and 2027 demand.