The German stock market has reached new heights this year, defying economic challenges. Key drivers include the "German Big Seven": SAP (SAP, Financial), Rheinmetall, Siemens, Siemens Energy, Deutsche Telekom, Allianz, and Munich Re. Investors remain optimistic due to Germany's lower valuations compared to the US and the diverse industry presence of these leading companies.
The DAX index, comprising 40 blue-chip stocks, has risen 18.7% this year, outperforming France, the UK, and the STOXX 600 index. SAP (SAP, Financial) has significantly contributed to this growth, with its stock price surging over 70% as it transitions to cloud services and capitalizes on AI trends. Other sectors such as defense and energy also saw substantial gains, with Rheinmetall and Siemens Energy stocks soaring due to geopolitical tensions and rising renewable energy demand.
Despite concerns over market concentration, many fund managers remain positive about the German stock market's resilience and international revenue streams.
