Go to content

AXA IM and BNPP AM are progressively merging and streamlining our legal entities to create a unified structure.

On 1st July 2025, AXA Investment Managers was acquired by BNP Paribas Cardif, the insurance subsidiary of BNP Paribas. 

Following the acquisition of AXA Investment Managers by the BNP Paribas group on 1 July 2025, the business of AXA IM Select Asia Limited will be transferred to BNP PARIBAS ASSET MANAGEMENT Asia Limited, an affiliate within the BNP Paribas group, from 1 April 2026. 

This website describes the services that BNP Paribas Asset Management delivers to its clients. 

Close Look: Why did AI tech pull markets higher?

What is the situation?

Since late March there has been a surge in equity markets which have a high exposure to tech hardware. In the US, the S&P 500 and the Nasdaq indices have touched new highs, while in Japan, the tech heavy Nikkei 225 has outperformed them both1. The new phenomenon driving markets has been hailed as ‘tech exceptionalism’ by some. This momentum trade buys into a surge in earnings growth within the sector, fired by the rollout of AI (artificial intelligence).

Cumulative 12 month earnings (US$) for MSCI World IT and MSCI World

Rebased 100 as of 31/12/2021

Source: Bloomberg, BNP Paribas Asset Management, 30 April 2026. Past performance is not a guide to future performance.

What is the background?

The so-called AI hyperscalers, that is Amazon, Meta, Microsoft and Google's parent Alphabet, have consistently upgraded AI capex spending plans over recent months. The collective total of planned spending for this year has jumped above US$700 billion2.

Anecdotally, the main beneficiaries of the California Gold Rush are said to have been the makers of picks and shovels. In much the same way, stocks that make tech hardware and semiconductors, are in hot demand. Indeed, the gains in the Philadelphia Semiconductor Index recently topped 70% year to date1.

The ‘AI everywhere’ investment theme is driving advances, including for old economy names, as the wave of investor enthusiasm gathers. Even the share price of US heavy truck manufacturer Caterpillar recently jumped, as its gas and diesel generators can be used as backup and primary power sources for AI data centres3.

Can AI tech sustain the rally?

The US enjoyed a strong Q1 earnings season, with average profits growth of 20% versus expectations of only 13%4. This significant ‘earnings beat’ was driven by the tech capex cycle, which so far appears to be resilient.

Newsflow from within the AI sector remains positive. As an example, AI giant Anthropic has successfully completed a fundraising round valuing the company at $900 billion5. Three months ago, the company was valued at $350bn5.

Add in expectations for major IPOs this year for SpaceX and OpenAI, and the tech sector might continue to power robust equity market performance.

What are the broader implications?

With an estimated 40% of US personal wealth in equities, recent market strength has boosted the ‘wealth effect’, with a knock on seen in better than expected US retail spending6. This in turn drives GDP growth forecasts, such as the Atlanta Fed's GDPNow, which was upgraded to 4% annualised growth for Q2 20267.

Within the context of stronger US growth, combined with a sharp jump in inflation due to energy price spikes, our economists believe that the chances of an increase in US interest rates have risen. The markets are expecting 30 basis points of rate hikes from the US Federal Reserve (Fed) by June 20278.

Expectations of higher interest rates have driven government bond yields higher. The yield on government bonds is used as a benchmark for the valuation of future earnings within equity markets. This could risk pushing valuation in the tech heavy sectors of the equity markets lower, if enthusiasm for the AI boom fades.

Our view

The rally in US equities has been particularly sharp. Nonetheless, we maintain a preference for US over European equities. We have also upgraded emerging market equities, seeking enhanced exposure to the global tech sector. Currently, the sources of growth are coming mainly from the technology sector, a trend which looks set to remain in place for the coming year. Europe seems unlikely to benefit from AI investments as much as the US or the emerging markets.

Elsewhere, the outcome of the current geopolitical situation remains uncertain, meaning that volatility of both economic and earnings growth forecasts is to be expected.

 

Sources: BNP Paribas Asset Management, as at 20 May 2026

All investment involves risk, including the loss of capital. The value of investments and the income from them can fluctuate and that past performance is no guarantee of future returns, investors may not get back the amount originally invested. Investors should not make any investment decision based on this material alone. The company information mentioned (if any) is for informational purposes only and should not be construed as investment advice, a recommendation or solicitation.

  • Source: Bloomberg, as at 18.05.2026
  • Source: Bloomberg, as at 18.05.2026
  • Source: Reuters, as at 30.04.2026
  • Source: Financial Times, as at 04.05.2026
  • Source: FactSet, as at 30.04.2026
  • Source: Financial Times, as at 15.05.2026
  • Source: Financial Times, as at 15.05.2026
  • Source: BNP Paribas Asset Management, as at 18.05.2026
  • Source: Atlanta Fed, as at 14.05.2026
  • Source: CME, as at 20.05.2026
    Follow us
    ©
    2026 BNP Paribas Asset Management. All rights reserved.

    Disclaimer
    This website is issued by BNP PARIBAS ASSET MANAGEMENT Asia Limited*. The content has not been reviewed by the Hong Kong Securities and Futures Commission. The information provided on this website is for information purposes only. It is not intended to solicit the subscription of or the sale of any financial instruments. In no event shall the content of this website be deemed as an investment advice with respect to any financial instruments or an offer to purchase or sell these. In addition, as the presentation of products in itself does not allow the making of a contract, it may neither be considered as a solicitation for purchase or sale of financial instruments or an offer of such to the public.

    No action has been taken which would permit the public offering of the financial instrument(s) in any other jurisdiction, except as indicated in the most recent prospectus, offering document or any other information material, as applicable, of the relevant financial instrument(s) where such action would be required, in particular, in the United States, or to US persons (as such term is defined in Regulation S of the United States Securities Act of 1933, as amended, which includes any resident of the United States, or any corporation, partnership or other entity created or organised under the laws of the United States, including any estate of any such person created or organised in the United States). Prior to any subscription in a country in which such financial instrument(s) is/are registered, investors should verify any legal constraints or restrictions there may be in connection with the subscription, purchase, possession or sale of the financial instrument(s).

    Investors considering subscribing for the financial instruments should read the most recent prospectus, offering document or other information for further details including the risk factors available from your local BNP Paribas Asset Management correspondents, if any, or from the entities marketing the Financial Instrument(s). Investors should consult their own professional advisors in respect of investment, legal, accounting, domicile and tax advice prior to investing in the funds in order to make an independent determination of the suitability of the consequences of an investment. Investments involve risks. The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial investment. Past performance is not a guide to future performance.

    Some of the services listed on this Website may not be available for offer to retail investors.

    Past performance or achievement is not indicative of current or future performance. Performance is calculated net of fees unless otherwise stated.
    Any views expressed here are those of the author as of the date of publication, based on available information, and subject to change without notice. This material does not constitute investment advice.

    Investments are subject to market fluctuations and the risks inherent in investments in securities. The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial investment. There is no guarantee that the performance objective will be achieved.

    * BNP PARIBAS ASSET MANAGEMENT Asia Limited, Suite 1701, 17/F, Lincoln House, Taikoo Place, 979 King’s Road, Quarry Bay, Hong Kong
    Back to top