Much of investor focus remains on US Big Tech, but for those looking to diversify in light of recent volatility, there are a number of European companies in the sector that are highly rated by analysts.
However, the release of a lower-cost artificial intelligence model by Chinese startup DeepSeek roiled tech stocks in January, as it prompted greater scrutiny over the level of spending on AI by major tech companies. Shares in chipmaker Nvidia (NVDA) — considered to be a key facilitator of the AI boom — fell sharply and wiped wiped $589bn (£465bn) off its market value, marking the largest single-day loss in stock market history.
Nvidia beat expectations in the fourth quarter, with revenue of $39.3bn compared to estimates of £38.2bn, while earnings per share of $0.89 were ahead of forecasts of $0.84. The company said it expected to generate revenue of $43bn for the first quarter, better than the $42.3bn expected.
Meanwhile, other members of the Mag 7 have struggled to impress investors with recent results. Shares in Microsoft (MSFT) and Alphabet (GOOGL, GOOG) fell on the back of the release of their results, despite reporting strong overall revenue and profits.
Given this volatility, investors may want to diversify their exposure to tech, which could include looking to other markets outside the US.
Here are some of the major technology stocks in Europe that are top rated by investment analysts.
The company's shares rose at the end of January after it posted better-than-expected fourth quarter earnings. ASML (ASML.AS) posted Q4 revenue of €9.2bn (£7.6bn), compared to estimates of €9bn, while earnings per share of €6.85 also beat expectations of €6.68.
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Christophe Fouquet, CEO of ASML (ASML.AS), also said in an interview with CNBC at the time that he believed DeepSeek would drive AI chip demand higher.
However, an escalation in trade tensions, particularly between the US and China, has weighed on chip sector stocks. Bloomberg reported early on Tuesday that the Trump administration was looking at tougher chip restrictions on China.
Despite potential trade headwinds to the chip sector, ASML (ASML.AS) remains a highly rated stock. Deutsche Bank (DBK.DE) has maintained a "buy" rating on ASML, while JPMorgan (JPM) has an "overweight" rating on the stock.
Sandeep Deshpande, head of European technology at JPM (JPM), said in a note on 30 January that ASML's market share in lithography segment "should exceed 80-89% (seen in the last decade) driven by higher EUV ASP [average selling price]."
Germany's SAP (SAP.DE), which provides software to help businesses manage their processes, is another top rated stock by Deutsche Bank (DBK.DE) and JPM (JPM) analysts.
The stock has continued to notch fresh highs, with the share price up nearly 61% over the past year.
In its full-year results released at the end of January, SAP (SAP.DE) posted a 10% increase in total revenue to €34.2bn. For cloud and software revenue specifically, SAP (SAP.DE) generated revenue of €29.8bn, an increase of 11%.
In addition, SAP's (SAP.DE) total cloud backlog — the cumulative amount of cloud revenue it expects to recognise in the future — was up 40% at €63.3bn.
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Operating profit was down 20% to €4.7bn.SAP (SAP.DE) said this was due to restructuring expenses of €3.1bn associated with its 2024 transformation programme.
For 2025, SAP (SAP.DE) said it expected to report cloud and software revenue of between €33.1bn and €33.6bn, while operating profit is forecast to come in at between €10.3bn and €10.6bn, on a non-International Financial Reporting Standards (IFRS) basis.
Johannes Schaller, analyst at Deutsche Bank Research, said in a note published on 29 January, a day after the results, that the total cloud backlog figure provided "unprecedented visibility for the company on a sustained group revenue growth acceleration beyond 2025."
"On the AI front, SAP (SAP.DE) now sees already 50% of new cloud deals being sold with an AI component embedded, a significant uptick from 30% last quarter," he said.
Amsterdam-listed investment group Prosus (PRX.AS) made headlines on Monday, after announcing that it is set to buy food delivery company Just Eat Takeaway (TKWY.AS) for €4.1bn.
Shares in Just Eat Takeaway (TKWY.AS) rocketed on the back of the news, while Prosus shares dipped, though the stock is still up 49% over the past year and is trading close to record highs.
Prosus (PRX.AS) is one of the largest technology investors and operators in the world and is part of South African internet company Naspers (NPN.JO). The firm already owns Brazilian platform iFood and has a minority stake in Berlin-based Delivery Hero (DHER.DE), among other food delivery companies.
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Deutsche Bank (DBK.DE) has a "buy" rating on the stock and Silvia Cuneo, director of European media and online research, said in a note on Wednesday that the offer from Prosus (PRX.AS) was a "compelling transaction for both groups".
"Prosus' (PRX.AS) strategic acquisition of Just Eat Takeaway.com (TKWY.AS) reshapes the European food delivery landscape and significantly enhances Prosus' position in this key growth sector," she said.
"While the market reacted with a mixed share price performance for Prosus (PRX.AS), potentially due to the perceived premium paid for JET, we believe this presents an attractive entry point for investors," Cuneo added.
In its half-year results, released in December, Prosus (PRX.AS) posted revenue of $3bn, which was up 26% year-on-year. Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) came in at $111m, which was up from an adjusted loss of $57m in the same period last year.
Shares in FTSE 100 (^FTSE) business information and data analytics company RELX (REL.L) hit an all-time high of £42 ($53) per share on the back of its full-year results, released earlier in February.
The stock has since eased back but is still trading nearly 10% in the green over the past year.
The company posted 7% growth in revenue at £9.4bn, while reported profit before tax had risen to nearly £2.6bn, up from close to £2.3bn in the previous year.
RELX (REL.L) said it planned to deploy a total of £1.5bn in share buybacks in 2025, of which £150m had already been completed.
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Look ahead, RELX (REL.L) said it expected to see another year of underlying growth in revenue and adjusted operating profit, as well as in adjusted earnings per share.
Erik Engstrom, CEO of RELX (REL.L), said that the use of AI and other technologies with its tools had helped drive the evolution of the business.
JPMorgan Cazenove analysts have an "overweight" rating on RELX (REL.L) and said in a note released on the back of the results that it remained one of their key picks in the media sector.
"RELX (REL.L) offers structural growth supported by increasingly sophisticated information-based analytics and decision-making tools," they said. "RELX’s (REL.L) STM [scientific, technical and medical] division offers strong cash generation and predictable revenues, which, when combined with business and geographic diversification at the group level, results in the best earnings visibility/quality in the media sector."
While Nvidia continues to dominate the chipmaking space, other players are also vying to become more competitive in the sector.
The European Commission recently approved a €920m German state aid package to support Infineon Technologies (IFX.DE) in setting up a new chipmaking plant in Dresden. The German city has become a hub for Europe's chipmaking industry, sitting in what has been dubbed "Silicon Saxony".
In the recent announcement, Teresa Ribera, executive vice-president for clean, just and competitive transition at the EC, said that the project would "support the development of a strong and resilient digital economy in Europe and ensure a secure supply of semiconductors for the industry while limiting any potential distortion of competition."
In Infineon Technologies (IFX.DE) first quarter results, released in early February, CEO Jochen Hanebeck said that the "positive stand-out is the move towards increased use of artificial intelligence, which is driving demand for our leading power supply solutions for AI data centers."
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Infineon (IFX.DE) reported a better start to the year than expected, despite posting a 13% fall in quarter-on-quarter revenue to €3.4bn. However, the chipmaker generated a profit of €246m in the first quarter, compared with a loss of €84m in Q4.
For the second quarter, Infineon (IFX.DE) said it expected revenue to come in at around €3.6m. The company raised its outlook for the year, though it said that was due to currency effects, anticipating revenue to be flat or slightly up compared to the previous year.
In a note released on the back of the latest results, Barclays analysts had an "overweight" rating on the stock.
"The key question will be why [Infineon] isn’t seeing the softness others have recently commented on, with its auto division better than expected in the reported quarter and expected to increase in the current quarter," they said. "China revenues were the only region to remain broadly steady which could explain part of the better performance. We also think [Infineon's] microcontroller business in auto is helping as well."
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