Deutsche Bank upgraded the U.S. and European technology sector to “neutral” from “underweight” on Tuesday and turned “overweight” on software, saying the months-long rout sparked by fears of AI-driven disruption has likely run its course.
The shift comes after a sharp global software selloff over the past six months that left valuations at historically thin premiums and fueled concerns the industry would struggle to outgrow the broader market.
Evidence now points the other way, Deutsche Bank said, with earnings proving resilient and no major company expecting a negative revenue impact from AI in 2026.
The brokerage also highlighted opportunities in Germany’s cyclical sectors including industrials and construction materials, which have slid in recent days despite what it sees as intact support from Berlin’s fiscal push.
(Reporting by Rashika Singh in Bengaluru)
