Europe: Stocks edge lower as investors weigh AI volatility; earnings, data in focus

Published Sat, Feb 14, 2026 · 10:25 AM

European shares edged lower on Friday (Feb 13) as concerns about potential artificial intelligence (AI)-driven disruptions kept investors cautious, while they also assessed a mixed bag of corporate earnings and economic data.

The pan-European Stoxx 600 index closed 0.13 per cent lower at 617.7 points. However, it capped a turbulent week with a marginal gain of 0.09 per cent.

Since late January, a cascade of new AI tools has sent shockwaves through global markets. Investors tried to weigh the impact of newer models on traditional businesses, at a time when major tech firms have forecast higher spending to develop the technology.

Disappointing gross margins from US-based Cisco Systems this week added to jitters.

So far, logistics companies, insurers, index operators, software companies and asset managers in Europe have borne the brunt of the sell-off.

The banking sub-index led the losses this week, down 5.4 per cent, with the sharpest weekly fall in over 10 months.

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The financials-heavy Italy benchmark slid 1.7 per cent on Friday.

While tech shares climbed 1.7 per cent on the day, the sector also remained among the week’s laggards.

“The narrative here is about AI overinvestment, valuations and disruption,” said Kyle Rodda, senior financial market analyst at Capital.com.

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“That is: AI companies are spending big and leveraging up to stay ahead in the AI arms race, reducing potential returns on capital, as new disruptive models hit the market and cast doubt over to whom the spoils of the AI boom will go.”

On the data front, US consumer prices increased less than expected in January, prompting traders to marginally increase bets on a Federal Reserve interest-rate cut in June.

Across the Atlantic, data revealed the EU’s trade surplus kept shrinking, as tariffs weighed on exports to the US and rising Chinese imports crowded out domestic production.

There was some relief on the earnings front. European companies’ quarterly earnings are now expected to fall 1.1 per cent on a year-on-year basis, improving from the 4 per cent decline projected earlier, according to data compiled by LSEG.

Still, it is expected to be the worst earnings performance in the past seven quarters, as companies navigate steep US tariffs.

The defence sector led gains on Friday, rising 3.3 per cent. Aerospace group Safran jumped 8.3 per cent to a record high after forecasting increased revenue and earnings for 2026.

Capgemini climbed 5.1 per cent after the French IT services group reported full-year revenue that beat its own target.

By contrast, L’Oreal slipped 4.9 per cent after the owner of Maybelline make-up missed fourth-quarter sales growth estimates. The broader personal and household goods sector fell 0.8 per cent. REUTERS

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