Jefferies has identified a short list of European technology stocks it believes are positioned to deliver relative outperformance in 2026, citing a market environment marked by elevated valuation multiples and geopolitical uncertainty.
The firm draws a distinction between two parts of the semiconductor value chain. It anticipates that "semicap" companies - those tied to cyclical semiconductor capital expenditure - will see a cyclical de-rating after reaching a peak in early 2026. In contrast, Jefferies expects analog-focused businesses with exposure to industrial markets and artificial intelligence (AI) applications to enter an upcycle driven by capacity tightness and upward pressure on chip prices.
Across its preferred names, Jefferies highlights scope for estimate upgrades and further valuation re-rating as a common theme. The bank's favored constituents include a mix of device makers, network equipment vendors and chip-equipment suppliers whose end markets are linked to AI datacentre buildouts, automotive semiconductors and optical networking.
STMicroelectronics (STM)
Jefferies cites STMicroelectronics as a primary pick on the back of improving industrial demand and the company's exposure to rising analog chip prices. The brokerage expects a positive revision to STM's outlook for the second half of 2026, supported by strong orders for optical transceivers - components used to link AI data centres - which should underpin revenue momentum.
Infineon
Infineon is highlighted as the leading automotive semiconductor supplier and a beneficiary of an anticipated restocking cycle plus price increases beginning in April 2026. Jefferies expects the company's AI power segment to grow at better than a 25% annual rate through 2030, which the firm views as a durable growth driver beyond conventional automotive demand.
Nokia
Nokia is expected to re-rate as it strengthens its positioning across AI and cloud infrastructure via its optical and IP networking product set. Jefferies points to the potential for Nokia to lift medium-term growth expectations as hyperscale customers raise demand for IP switching capacity.
Aixtron
Aixtron is named for its leadership in deposition equipment for compound semiconductors. Jefferies notes the company is well placed to benefit from demand associated with optical networking, and that its systems are important for power electronics and optical data communications relevant to AI infrastructure.
SUSS (SUSS MicroTec)
SUSS is identified as an attractive AI infrastructure exposure, trading at a material discount to peers in Jefferies' view. The broker expects orders to trough and points to scheduled new product introductions in bonding and cleaning during 2026, with a recovery in revenues and margins anticipated into 2027.
Jefferies emphasizes that these picks share exposure to end markets where capacity constraints and strong demand are likely to support pricing and margins. The bank recommends monitoring estimate revisions and valuation multiple movement as signals of the thesis unfolding into 2026.