Certain "intermediate" European technology stocks are hot property. Nokia, STMicroelectronics, Infineon... these names may be less legendary than Apple, Meta, or the major American platforms, but they are now outperforming them on their own turf.
No global social network, no planetary search engine, no dominant cloud, no multi-hundred-billion-dollar advertising ecosystem. Just companies often less known about by the general public, sometimes absent from major "tech" conversations, although present in factories, production lines, power grids, data centers, satellites, radars, machine tools, sensors and chips.
Since the beginning of the year, however, it is precisely this kind of tech player that has been attracting capital. The kind that equips, automates, secures, electrifies, and re-arms the European economy. Several factors are converging to explain this comeback: more active government intervention, specific industrial strengths, and a new financial momentum in Europe.
A New Regulatory and Strategic Context
The first key to success lies in the European regulatory framework. Since 2024, the European Union has launched a series of measures to limit the hegemony of American platforms. The Digital Markets Act (DMA) is one of its symbols: an "ex ante" regulation that sets strict rules for the GAFA giants deemed too large—the famous "gatekeepers" capable of locking down entire markets.
Already, in April 2025, the European Commission fined Apple €500m and Meta €200m for non-compliance with these rules, particularly regarding app locking and data management. The underlying message: all companies operating in the European Union must respect European rules and values. This aims to break monopolies, restore fair competition and enable new local champions to emerge.
In practical terms, these regulations force platforms to open their ecosystems. Apple Maps services or Apple's payment system will eventually have to be accessible to third-party players. Meanwhile, Meta has already had to rethink its advertising targeting model. This progressive dismantling of barriers to entry encourages the advent of alternative European solutions.
Companies are therefore innovating to capture the space that is now available. And these regulatory developments do not come alone. Public funds are also committing to this path. Beyond the DMA, Brussels and member states are unlocking vast investments in strategic sectors: chips, AI, cybersecurity, defense and clean energy.
To support this transition, the Commission and Germany have announced massive recovery plans: up to €800bn over four years in European defense, and a German plan of €500bn over 12 years. These colossal sums are intended to modernize key industries and stimulate local technological innovation.
On the ground, this translates into unprecedented public orders and industrial partnerships. Equipment contracts for 5G networks and AI, which can benefit Nokia or Ericsson. Subsidies for semiconductor manufacturing, favoring STMicro, Soitec, and other players. Investments in "sovereign" AI, with aid to startups like Mistral AI or Hugging Face.
Specific Industrial Strengths
Beyond politics, Europe's comparative advantages in certain technologies also explain the outperformance of mid-techs. Europe may not be the Silicon Valley of consumer applications, although it remains a world leader in several strategic segments.
For example, in semiconductors, specialized European companies are benefiting from the exponential demand relating to AI and the automotive industry. Manufacturers of so-called analog or industrial chips, exposed to AI, are entering a new cycle of rising prices and orders.
Nokia has seen its orders grow thanks to its optical networking and IP switching solutions, essential for connecting AI data centers. In Q1 2026, the Finnish group reported a 54% increase in comparable operating profit to €281m, exceeding analysts' expectations. Its sales to AI and cloud-related customers jumped 49%, with €1bn in new orders. The group now estimates that its AI/cloud addressable market could grow by 27% p.a. between 2025 and 2028. This is anything but a story.
Infineon is also benefiting as the world's leading supplier of automotive chips. The group has initiated an inventory restocking cycle and forecasts strong increases in its AI and power ranges.
STMicroelectronics is also benefiting from sustained industrial demand and rising prices for AI-related analog integrated circuits. The Franco-Italian group reported $3.10bn in revenue for Q1 2026, above expectations, and is targeting $3.45bn for Q2, again well above the consensus.
The Dutch manufacturer ASML, although already a large company, benefited from a surge in orders for advanced chip machines, to the point of raising its 2026 forecasts. This momentum boosted the entire downstream sector, notably the French company Soitec. Even smaller players, such as Germany's SUSS MicroTec, specialized in chip equipment, and Aixtron, active in semiconductor deposition, are gaining momentum.
Result: stocks are climbing in 2026.
+31% for ASML
+42% for Infineon
+66% for Nokia
+77% for SUSS MicroTec
+88% for STM
+155% for Aixtron
Up to +372% for Soitec (!)
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A Combination Creating Momentum
This rally does not stem from a single cause. It comes from a combination of factors.
Lower valuations. Modest expectations. Pleasantly surprising results. Massive public plans. Rising defense budgets. Increasing energy needs. AI requiring physical infrastructure. Larger share buybacks. Tougher regulation against American platforms. International investors under-exposed to Europe.
It is this combination that creates the movement. And European companies are organizing to seize these opportunities faster than in the past.
A Turning Point in Ecosystem and Confidence
These phenomena are feeding a virtuous cycle. Europe is gradually asserting its technological narrative. There is less and less talk of "dependence." Instead, we are starting to talk about capabilities, specialization, sovereignty, and critical value chains.
The success of French or Swedish payment platforms, such as Adyen or Klarna, and European streaming giants like Spotify or Deezer, has already shown that it is possible to create global champions.
The challenge now is knowing how to retain them.
Because the issue is not just about fostering the emergence of innovative companies. It is also about allowing them to grow in Europe, to be financed in Europe, to stay in Europe, and not to end up absorbed by American markets, capital or acquirers.
Challenges and Outlook
However, this reversal is not guaranteed to last without setbacks.
Success will depend first on maintaining political and social confidence. For example, the German coalition will need to remain united on its industrial policy. Any sign of disunity could dampen this nascent enthusiasm. We must also avoid the opposite extreme.
European mid-techs have not magically become better than American giants. They often remain more cyclical, more dependent on industrial orders, more exposed to inventory cycles, manufacturing margins, energy costs, political decisions, and budgetary execution.
The €800bn European defense plan is massive, but it still needs to translate into concrete orders, production capacities and margins.
The energy needs associated with AI are considerable, but they can also create bottlenecks. Nokia points out that Europe risks falling behind the United States and China in AI data centers, particularly due to energy, regulatory, and connectivity constraints.
Similarly, American platforms sometimes threaten to limit their services or slow down their investments in Europe in response to sanctions. This was the case with Apple, which threatened to halt deliveries in 2025. Investors will therefore need to keep an eye on the concrete execution of reforms and the evolution of transatlantic tensions.
