AI Bubble Fears Trigger a Surprising Shift to Swiss Stocks

In October, Swiss blue chips beat euro-area peers by almost 8 percentage points, the widest gap since March 2020, with the Swiss Market Index up 4.6% while the Euro Stoxx 50 fell 3.2%. Its three largest companies—Roche, Novartis and Nestlé, together almost half the index's value—produced the entire gain, rising 12%, 6.7% and 10%, respectively, as investors favored profitable firms with strong balance sheets less exposed to rising borrowing costs. The shift coincided with a global AI-stock selloff in which 20 top AI and chip stocks lost over $1 trillion from October 12 to 15. A Bank of America survey of fund managers polled October 2 to 8 showed their largest tech allocation since August 2020.