Nokia, Aixtron, and other European AI hardware stocks have doubled this year, with the highest increase nearing 200%.

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The global AI infrastructure boom is fueling a batch of European beneficiary stocks. Although Europe lags behind China and the US in the AI race overall, a handful of European tech companies focused on hardware and infrastructure have seen their share prices double, even nearly triple this year, becoming important targets for investors chasing the AI concept.

German chip manufacturing equipment maker Aixtron’s share price has soared as much as 189% this year, Italian wafer testing equipment company Technoprobe is up 129%, chipmaker STMicroelectronics has risen 133%, and Nokia, which has completed its strategic transformation, is up 108%. In contrast, the pan-European STOXX 600 index has only risen about 3% this year.

Analysts point out that the core driving force of this trend comes from an unprecedented wave of capital expenditure by tech giants. As demand for computing power continues to climb, investors' attention has extended from frontend AI model developers to "enabler layer" companies such as data center builders, network equipment, and chip manufacturing equipment, allowing relevant European companies to benefit.

However, several analysts warn that the steep rise of a few individual stocks does not mean the European AI sector will see comprehensive prosperity. Structural constraints such as regulatory barriers, electricity grid capacity limits, and land scarcity will still cause Europe’s AI infrastructure development to lag visibly behind the US.

AI Infrastructure Boom Fuels Multiple Gains

Aixtron is the standout stock in this round of European AI hardware rally.

This German company specializes in designing and manufacturing advanced equipment for chemical vapor deposition—processes to deposit ultra-thin material layers on silicon wafers. Their share price has surged more than 300% over the past 12 months, making it the second-best performing stock on the STOXX 600 index, only behind pharmaceutical company Abivax. In April this year, Citi raised Aixtron’s price target by over 66%, citing improving demand and margin trends and noting AI as the top driver for its 2026 performance outlook.

STMicroelectronics’ AI exposure comes via two pathways: first, providing power semiconductors for the industry’s shift from traditional low voltage architecture to more efficient 800-volt systems; and second, supplying optical products for high-speed interconnection in data centers. Morningstar senior equity analyst Brian Colello told CNBC, "AI infrastructure construction is consuming all sorts of semiconductors, which benefits STMicroelectronics and similar companies."

Nokia is another typical example in this round of rally. Once a global mobile phone giant, Nokia has completed a strategic transformation, focusing on providing network equipment and optical products for AI data centers. Nokia completed its acquisition of Infinera early last year, making it one of the world's largest optical network equipment suppliers. In October last year, NVIDIA announced a $1-billion purchase of Nokia shares, boosting its stock price by 22% in a single day.

Italian firm Technoprobe mainly produces probe cards—a type of electromechanical interface device for testing silicon wafers. In May this year, Bank of America upgraded Technoprobe’s rating to “Buy,” expecting its earnings to continue growing in the coming years, driven by GPU demand. Overall, the STOXX Europe All Market Semiconductor Index is up 84% this year, far outpacing the STOXX 600’s roughly 3% gain.

Liquidity Scarcity Amplifies Capital Concentration Effect

JP Morgan's cross-asset strategy chief Fabio Bassi said as demand for computing power continues to rise, investors are expanding their vision to "enabler layer" companies, including data center developers, network equipment vendors, chip equipment makers, as well as electricity, cooling, and software tool providers. This trend is driving continuous flows of capital into European targets.

"In Europe, scarcity amplifies this trend," he said:

"There are extremely few large-cap, highly liquid, pure-play AI targets, so capital is concentrated in the handful of stocks seen as AI proxies, which combine genuine AI exposure with crowded holding structures."

Brian Colello also pointed out that the scope of beneficiaries in the AI infrastructure space may further expand in the future—beyond current hardware suppliers to software, fintech, healthcare, and robotics. "Since every country hopes to deploy AI in its own language, we expect local AI winners to emerge around the world," he said.

Regulation and Infrastructure Limit Europe’s AI Expansion Outlook

Although some stocks have performed impressively, analysts overwhelmingly believe that these gains alone are not enough to declare a comprehensive takeoff for the European AI sector.

Morningstar equity analyst Martin Szumski told CNBC that regulatory barriers will cause AI infrastructure deployment in Europe to be slower than in the US. "Interest in supporting AI infrastructure is rising in Europe, and Nokia can benefit from this, but overall progress will proceed under a regulatory framework fundamentally different from the US." He specifically mentioned electricity grid capacity constraints, data center construction moratoriums, and compliance with the EU AI Act as major hurdles to expanding Europe’s AI infrastructure.

"Compared to the US, there are far fewer locations in Europe able to acquire more than 500 acres of land and with adequate electricity and water resources to support AI data centers," Szumski added. "For now, the winners in AI trades remain the companies selling to the US market."

Fabio Bassi also emphasized that it is still too early to interpret recent stock movements as a signal that AI will become a broad, sustained driver for European economic growth and stock market performance. He said this rally’s lesson "is not a general renaissance for European tech," but rather "a narrow transmission path toward the handful of European companies with real data center expansion exposure and the ability to translate demand into profits."

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