Stock market outlook 11/2025: How much substance is there in the AI boom?

November 5, 2025

What has been the focus in recent weeks

October was dominated by the presentation of corporate results for the third quarter. Once again, the overall very positive figures of the major US tech companies were remarkable, driven by topics relating to AI (artificial intelligence) and the cloud business. However, due to the high investments made by these companies, their business models are increasingly moving away from “asset-light”. This means that the investments tie up a lot of capital, with a corresponding impact on the cost of capital and an increased susceptibility to rising interest rates.

As expected, the US Federal Reserve lowered the key interest rate by 0.25 % points. However, Fed Chairman Jerome Powell dampened expectations of further interest rate cuts this year. Some surprisingly positive economic signals came from the eurozone, while these were mixed in Switzerland and the USA. The purchasing managers’ index in the US manufacturing sector, for example, fell in October and therefore does not point to growing industrial activity – quite the opposite.

The so-called “shutdown” in the US was less of a concern for the markets. This is a further indication that the markets have become accustomed to the US government’s style. In this context, it is worth mentioning that there have recently been signs of easing in the trade dispute between the US and China. However, it remains to be seen whether this is really sustainable.All in all, the environment in October was friendly for the markets. The extremely high gold sales by private investors in the third week of October – following massive purchases in the previous weeks – made the gold price very volatile.

Our investment solutions and positioning

Our multi-asset solutions made gains across all risk categories in October. The drivers behind this development were once again gold, as well as international equities. On the other hand, Swiss equities slowed the trend somewhat. We reduced our gold position slightly over the course of October. We remain positive on gold, but wanted to reduce the position to the target weight due to the strong performance.

In the equity strategy Global Equity Trends equity strategy, we disposed of financial stocks at the turn of the month. Although these are among the winners over the year, they have lost momentum in recent weeks and months. We invested the funds freed up by the sale in global quality stocks. Although these are still lagging behind the overall stock market year-on-year, they have been steadily improving since late summer. Overall, the positioning remains offensive.

Our equity strategy Swiss Equity Selection also made gains in October. However, after a brilliant start to the month, the pharmaceutical giants Novartis and Roche in particular came under pressure in the second half of the month and weighed on the overall result. Investors celebrated the announcement of Nestlé’s restructuring plan with a price jump of almost ten percent, but the market has since revised its opinion. We have also recently reduced our weighting in the financial stocks somewhat in favor of Richemont and ABB.

With the resurgence of quality stocks, our equity strategy Global Equity Selection was also able to gain ground. The main drivers of this development were well-known names such as Alphabet (Google) and Amazon. Both were able to impress investors with the presentation of their quarterly figures. However, smaller companies such as the Swiss company Galderma were also among the winners. On the other hand, Netflix lost some of its favor with investors. This was mainly due to unexpectedly high expenses in connection with a tax dispute in Brazil. In general, however, we remain positive about high-growth quality stocks.

What next? And what needs to be considered?

The strong corporate results and forecasts in many places should continue to provide a tailwind for the stock markets. Even if company valuations are now high: The financial solidity and expected growth rates justify these valuations in many cases. However, there are also signs of an advanced bubble forming among unprofitable AI companies. It is important to keep an eye on this.
Even if the markets have become more and more accustomed to the erratic style of the US government, this naturally remains an unpredictable factor. In the short term, a diversified investment strategy is recommended. For the truly long-term oriented investor, however, these short-term developments are not of great importance anyway. We remain confident about the positioning and development of our investment solutions.

Point Capital Group
5. November 2025

Our experts: Jules Kappeler (CEO) & Christian Sutter (Portfolio Manager)