Save from as low as €40 per month Change modify pause
In a market climate dominated by continuous change, uncertainty, trade tensions, and geopolitical headwinds, behavioral finance can help investors make smart decisions.
Volatile markets often test investors’ discipline, reinforcing the importance of a rational, long-term investment approach. The first ten months of 2026 have seen sharp market fluctuations, driven by uncertainity over U.S. policy shifting views on which company will ultimately benefit from the artificial intelligence investment cycle. While such conditions can challenge even seasoned investors, they also show why patience, fundamental conviction, and disciplined capital allocation continue to matter. Market sentiment and valuation cycles may fluctuate considerably, but sustainable earnings growth, strong cash generation and lasting competitive advantages are what drive long-term shareholder returns. Ultimately, successful investing means having the discipline to look beyond short-term market noise and stay focused on underlying business value.
Over the past six months, global financial markets have faced an increasingly challenging economic and geopolitical environment, marked by persistent inflation, high energy prices, shifting expectations on monetary policy and substantial volatility across asset classes. Despite repeated corrections, global equities held up well, supported by strong corporate earnings and sustained investment in artificial intelligence infrastructure. However, the sharp rise in developed-market sovereign bond yields, particularly towards the end of the period, pointed toward growing tensions between the AI investment theme and the vast sum needed to fund the Ai infrastructure behind it.
At the economic level, the gap between the regions widened. The U.S. economy stayed relatively resilient, supported by heavy technology investment and a more favourable energy positions, although early signs of a softer labour-market weakness pointed towards a gradual slowdown . Europe remained more exposed to high energy costs and weak industrial demand, while emerging markets faced additional pressure from a stronger U.S. dollar and tighter global liquidity. Inflation persisted, made worse by disruptions to energy supplies and international shipping through the Strait of Hormuz and Bab el-Mandeb. In response, major central banks adopted increasingly hawkish policy stances, while rising sovereign yields tightened financial conditions further.
The artificial intelligence investment cycle continued to dominate equity markets. Strong earnings momentum and large hyperscaler capital expenditure commitments initially supported technology, semiconductor and networking infrastructure companies. Investor appetite extended beyond AI too. The largest IPO in history was oversubscribed by more than 5 times as individual investors piled in for a piece of SpaceX.
The period also exposed a widening gap between company fundamentals and short-term market sentiment. Retail leverage and concentrated thematic positioning amplified market movements, pushing valuations well out of line. Semiconductor companies and AI infrastructure suppliers rallied hard initially once it became clearthat the hyperscalers’ capex splurge will continue into 2027. Later, they experienced an aggressive derating giving back a lot of their initial gains despite generally resilient operating performance, as concerns grew over the availability of the required funding for such investment plans. In October, investors rotated back towards energy, healthcare and other value-oriented sectors, while emerging markets underperformed amid weakness in South Korean technology stocks.
Looking ahead, high government bond yields, persistent inflation, geopolitical uncertainty and stretched valuations remain key risks. Even so, recent market corrections offer opportunities to selectively increase exposure to high-quality cash-generative businesses that stand to benefit from durable structural growth trends. Valuation discipline, diversification and portfolio flexibility remain central to navigating an increasingly complex investment environment.
Taiwan Semiconductor Manufacturing Company, our highest conviction holding, highlights the importance of fundamental discipline and long-term view. Despite exceptional financial performance and its central role in the global AI infrastructure investment cycle, the stock has been affected by heightened emerging-market volatility, made worse by excessive retail leverage and speculative positioning. The resulting disconnect between strong underlying fundamentals, attractive valuation metrics and deteriorating investor sentiment has constrained its share price appreciation to +7.6%. Nevertheless, including dividends, TSMC has slightly outperformed global equities during the period.
Our second recommendation, Meta Platforms, was volatile over the period as investors continued to assess the implications of its aggressive capital expenditure program, particularly its impact on the company’s historically low-debt balance sheet and strong cash flow generation. On the other hand, the launch and rapid adoption of its personal AI agent, Muse, raised expectations that these substantial investments could translate into meaningful monetisation opportunities, positioning Metaamong the potential long-term beneficiaries of the AI revolution. Nevertheless, the stock was caught up in the broader derating of AI-related equities towards the end of the period, resulting in a relatively modest +5.5% share price return.
Among our AI infrastructure picks, Arista Networks delivered strong operational and financial performance, exceeding market expectations and benefiting from continued investment in data-centre networking infrastructure. These robust fundamentals initially drove a substantial rise in share price, supporting our investment case. However, the sharp turn in sentiment towards AI-related equities towards the end of the period triggered a significant valuation correction, wiping out its earlier relative outperformance. As a result, the stock concluded the period with a modest +2.6% price return.
Booking Holdings, which we selected after February’s sharp software-sector selloff, delivered operational and financial results broadly in line with our internal forecasts. Howeve, unlike many other companies affected by the initial correction, the stock has yet to experience a meaningful recovery. Concerns that AI could disrupt its business model have so far proved largely unfounded, but weak consumer sentiment and high energy prices have continued to weigh on investor confidence and travel-sector valuations. As a result, despite resilient underlying fundamentals, the stock generated a total return of –7.0% over the period.
Finally, GE Vernova, until recently one of the main beneficiaries of the AI infrastructure investment theme, experienced a significant valuation correction as investors reassessed its high earnings expectations. Our investment report anticipated continued positive momentum into year-end, supported by strong financial results and favorable industry fundamentals. However, growing concerns over how the AI infrastructure build-out will be financed increasingly overshadowed the company’s robust operating performance. As a result, despite supportive fundamentals, GE Vernova recorded a price return of –16.8% over the period.
Despite ongoing market turbulence, certain companies continue to capitalise on emerging opportunities and strengthen their competitive positioning, making them attractive additions to put on your watchlist. This article puts the spotlight on 5 such companies, identified through the following structured 3-step analysis:
Amphenol Corporation continues to strengthen its position as a leading global provider of high-performance interconnect, sensor and power solutions, benefiting from its critical role in the rapidly expanding AI infrastructure ecosystem. Despite operating in a competitive environment characterised by elevated customer expectations, evolving technological requirements and growing concerns over the sustainability of AI-related capital expenditure, the business continues to show exceptional operational momentum. Revenue growth is driven by accelerating demand for high-speed connectivity, advanced networking architectures and power distribution solutions across hyperscale data centres, as well as by its diversified exposure to aerospace, defence, automotive and industrial markets. Its decentralised operating model, disciplined acquisition strategy and strong cash generation reinforce its competitive advantages and capacity to sustain profitable growth.
Following recent share price volatility, as the market derated the AI infrastructure investment cycle, we believe the stock now offers an increasingly compelling risk-reward proposition. Its mission-critical products, strong customer relationships and growing content per data-centre deployment provide considerable earnings visibility, while continued hyperscaler investment commitments should support further positive earnings revisions. We expect the recent valuation pressures to prove largely temporary, with resilient operating performance and steady demand for advanced connectivity solutions providing catalysts for renewed share price appreciation.
Broadcom Inc. continues to strengthen its position as a leading provider of mission-critical semiconductor and infrastructure software solutions, benefiting from its strategic exposure to the accelerating AI infrastructure investment cycle. Despite growing investor concerns surrounding the sustainability of hyperscaler capital expenditure, the company’s fundamental growth drivers remain firmly intact. Its leadership in custom AI accelerators, high-performance networking silicon and advanced connectivity solutions positions Broadcom as a key beneficiary of the transition towards increasingly sophisticated AI computing architectures. Its highly profitable infrastructure software franchise, built around VMware, provides recurring revenue streams, substantial operating leverage and strong free cash flow generation, adding to the resilience and diversification of the group’s business model.
Following the recent valuation pressures across AI-related equities, Broadcom offers an attractive entry point, supported by rising demand for custom chips, expanding hyperscaler relationships and continued earnings growth. We believe the market is underestimating the durability of Broadcom’s competitive advantages and its ability to capture an increasing share of AI infrastructure spending.
Schneider Electric has become one of the highest-quality beneficiaries of three overlapping investment trends; the global electrification, energy efficiency and AI infrastructure. It is leveraging its leadership in energy management, electrical distribution and industrial automation to meet the fast-rising demand for intelligent power infrastructure. The rapid expansion of hyperscale data centres and AI computing capacity is driving structural demand for advanced power distribution, cooling, grid connectivity and energy management solutions, areas where the company maintains formidable competitive advantages. Its diversified exposure to industrial automation, building electrification and grid modernisation provides additional long-term growth opportunities, broadening its potential market and reducing dependence on individual investment cycles.
Operationally, Schneider Electric combines steady organic growth with attractive profitability, supported by its extensive installed base, expanding software and services revenues and strong pricing capabilities. Its recently announced acquisitions of PTC and Cognite represent a strategic push into industrial software and AI, strengthening its ability to integrate engineering, operational and energy data while expanding recurring revenues and cross-selling opportunities. Although the scale and financing of these transactions introduce execution and balance-sheet risks, we believe their strategic benefits could reinforce Schneider’s competitive positioning and support medium-term margin growth. Together with continued electrification demand and disciplined operational execution, these developments underpin our conviction in the company’s ability to deliver durable earnings growth and attractive shareholder returns.
Intuit remains one of the strongest financial technology franchises, leveraging its leading positions in tax preparation, accounting and small-business financial management through TurboTax, QuickBooks, Credit Karma and Mailchimp. Its deeply embedded customer relationships, extensive proprietary financial datasets and integrated software ecosystem create substantial switching costs and lasting competitive advantages. The company continues to benefit from recurring subscription revenues, attractive operating margins and strong free cash flow generation, while its expanding AI capabilities offer meaningful opportunities to automate financial workflows, enhance customer engagement and accelerate monetization.
Following a significant valuation derating driven by concerns that generative AI could disrupt traditional financial software business models, we believe Intuit offers an increasingly compelling medium-term investment opportunity. These fears appear overstated, given the complexity of tax compliance, the importance of trusted financial data and Intuit’s established distribution advantages. Rather than weakening its competitive position, AI could strengthen its products through intelligent automation and personalised financial services. In our view, resilient earnings growth, continued product innovation and a very promising technical setup provide attractive catalysts for shareholder returns.
JPMorgan Chase remains one of the highest-quality financial institutions globally, combining unmatched scale, a diversified earnings base and industry-leading positions across consumer banking, corporate lending, investment banking, payments and wealth management. Its large deposit franchise, superior funding capabilities, disciplined risk management and strong capital generation give it a structurally advantaged business model. The bank continues to benefit from its leading market positions, technological investments and ability to capture market share across economic cycles, while its diversified revenue streams provide cushion against fluctuations in any individual business segments.
The Federal Reserve’s renewed hawkish stance and recent initiation of an interest rate hiking cycle, alongside rising government bond yields, create an increasingly favorable environment for JPMorgan’s net interest income and reinvestment yields. While higher rates may eventually weigh on credit demand, funding costs and asset quality, we believe the bank’s strong deposit base, conservative lending standards and solid capital position provide meaningful competitive advantages. Supported by resilient profitability, sustained shareholder distributions and continued market share gains, JPMorgan remains exceptionally well positioned to deliver attractive risk-adjusted returns over the medium term.
This analysis was conducted by Cosmin Alexandru Mizof, Investment Manager at Calamatta Cuschieri.
Markets in 2026 and beyond are likely to remain volatile, shaped by regulatory risk over the AI industry, a weak consumer sentiment, hawkish monetary stance, and grinding geopolitical risks. Rather than trying to predict every macro turn, focusing on high-quality companies with solid earnings power, scalable models, and undervalued entry points may be the best path forward.
These five picks represent a strategic mix of resilience, strong cash generation power, and secular growth potential. Investors are still encouraged to do their own research or seek guidance from an expert advisor to set up their ideal investment portfolio.
This equity research document is issued by Calamatta Cuschieri Investment Services Ltd “CCIS”. Newly issued research recommendations and target prices supersede previously published research.
The financial instruments discussed are intended for retail clients however, they may not be suitable for all investors and investors must make their own informed decisions and seek their own advice regarding the appropriateness of investing in financial instruments or implementing strategies discussed herein. The value of the investment may go down as well as up and may be affected by changes in currency. Where investments are denominated in a currency other than the investor’s base or reporting currency, changes in foreign exchange rates may adversely affect the value and/or returns of the investment. Any performance figures quoted refer to the past and past performance is not a guarantee nor a reliable guide to future performance.
This information is being provided solely for information purposes and should not be deemed or construed as investment advice, tax, legal, or any other ancillary regulatory advice. CCIS does not accept liability for actions, proceedings, costs, demands, expenses, damages, and losses suffered by persons as a result of information, views, or opinions appearing in this document.
All investment services are brought to you by Calamatta Cuschieri Investment Services Ltd (CCIS) C13729 which is licensed by the MFSA to undertake investment services business under the Investment Services Act, Cap 370. Calamatta Cuschieri Investment Services Ltd is a member of the Maltese Investor Compensation Scheme. Instruments entrusted with us are covered under the Investor Compensation Scheme Regulations.
The company is a subsidiary of Calamatta Cuschieri Moneybase plc and is registered at Level 0, Ewropa Business Centre, Dun Karm Street, Birkirkara BKR 9034, Malta.
Disclaimer
The information provided on this website is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Similarly, any views or opinions expressed on this website are not intended and should not be construed as being investment, tax or legal advice or recommendations. Investment advice should always be based on the particular circumstances of the person to whom it is directed, which circumstances have not been taken into consideration by the persons expressing the views or opinions appearing on this website. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views, or opinions appearing on this website. You should always take professional investment advice in connection with, or independently research and verify, any information that you find or views or opinions which you read on our website and wish to rely upon, whether for the purpose of making an investment decision or otherwise. CC does not accept liability for losses suffered by persons as a result of information, views, or opinions appearing on this website.
Calamatta Cuschieri Investment Services Ltd is licensed to conduct investment services business under the Investments Services Act by the MFSA and is also registered as a Tied Insurance Intermediary under the Insurance Distribution Act.
Don’t miss a beat. Sign up for our newsletter
1
You are signing up to receive news, updates, general market announcement, articles and product or service marketing. By signing up you are consenting to our privacy policy and can unsubscribe at any time.
Δ
To provide the best experiences, we use technologies like cookies to store and/or access device information. Cookies are used for ads personalisation. Consenting to these technologies will allow us to process data such as browsing behavior or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
