In recent weeks, three major focuses stand out for the markets. First, tariffs and political instability in the United States. Despite the noise, the economic balance is relatively positive: the average effective rate falls from 15.3% to 13.2%. Asia, Brazil or China are favored with the 15% universal tariff, while the United Kingdom, Australia or Europe could be harmed. Uncertainty will remain until 150 days from now, when section 122 promoted by Donald Trump must be renewed in Congress.
The second focus is the conflict with Iran. The US military deployment – with aircraft carriers such as the Abraham Lincoln and the Gerald Ford – shows real tension. The economic impact would be concentrated in energy, although predictably without rebounds as intense as in previous crises, given the level of strategic reserves.
The third is the disruption of artificial intelligence. A scenario proposed by Citrinis Research points to 10% unemployment in the US in 2028 and a strong stock market correction, with a special impact on “white collar” jobs. The risk is a deflationary environment if revenues fall faster than costs.
All in all, the current context remains constructive: fiscal stimulus, 175 basis points of rate cuts in the US, solid growth and corporate profits at record highs. We maintain a positive vision, betting on diversification, with the US as the core of the portfolio and clear opportunities in emerging markets. South Korea stands out, whose KOSPI rises 44% this year driven by Samsung and SK Hynix, in an environment of strong export growth and leadership in the AI value chain.
Nvidia Accounts
The NVIDIA price has shown little movement in today’s session. In the last ten quarters, the stock has moved an average of 3.2%, with periods of strong increases and other periods of flatter growth. In the past Nvida has consistently surprised by exceeding the high range of estimates; Now it is located in the middle part, although with extraordinary figures: 74,000 million dollars in revenues, earnings per share of 1.6 dollars – a year-on-year growth of 80% – and margins of 74%, with forecasts even improved to 75%. Data centers contributed 62,000 million compared to the 60,000 expected. These are outstanding results, but it falls below the range and the price «pays» for it. The company maintains its leadership in GPUs, fundamental in the development of AI, and the increase in demand for memory chips reinforces its position.
The debate is no longer whether AI is a bubble, but rather which companies will be left behind. When the market question changes, prices and valuations change too. Sectors such as software show weakness despite the growth in income, recalling what happened with newspaper companies in 2000, whose income was still growing while their prices fell in anticipation of the disruption of the internet.
Values to focus on
We remain positive in the United States, although we recognize that stock picking is complex. For this reason, we consider it more appropriate to invest through ETFs that replicate indices or sectors, instead of selecting individual securities.
At the IBEX 35 we maintain a cautious view on banking, given the demanding level of valuation and recent unconvincing results. Instead, we highlight values such as Inditex and ACS. Inditex has presented formidable results, with double-digit growth, a debt-free balance sheet, strong cash generation and improved margins thanks to the decrease in raw material and transportation costs; Zara leads growth within the group, driven by the rebound in consumer discretionary following the rate cuts. ACS, for its part, benefits from the leadership in data centers in the United States, the boost in infrastructure in Germany after the elimination of the debt brake and the dynamism in Spain and Australia; Its order book continues to grow and is placed in an advantageous position regarding possible future reconstructions in Venezuela or Ukraine.
We also highlight Puig Brands for its sales growth, especially in the aspirational segment.
Repsol is another example of strength in the Ibex 35: it rose strongly last year despite the fall in crude oil, a reflection of excellent management, strategic discipline and attractive dividend yield.
Finally, attention to utilities and SOCIMIs. The latter have been left behind and have suffered in the United States due to the reduction in office space resulting from layoffs. Utilities, on the other hand, could benefit from positive real rates and increased spending on infrastructure. In short, there are clear alternatives to a possible lower dynamism in the banking sector.