AI Bubble Fears Trigger a Surprising Shift to Swiss Stocks

Swiss blue chips lead euro-area peers by almost 8 percentage points in October, the widest gap since March 2020. The Swiss Market Index (SMI) is up 4.6% this month, and the Euro Stoxx 50 is down 3.2%. Bloomberg linked the gap to 3 forces pushing investors to cut risk in Europe. Rising borrowing costs Growing doubts about the AI trade Political turmoil in France and Spain 3 Giants Carry the Swiss Lead Investors in Europe have favored profitable companies with strong balance sheets, which are less exposed to rising borrowing costs. Bloomberg named the SMI one of the biggest beneficiaries of that shift, and its 3 largest companies produced the entire October gain. Drugmaker Roche has climbed 12% in October, and rival Novartis has added 6.7%.

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