BBVA Equity Strategy: Equity views for the remainder of 2025 and beyond

Bordeaux Client Conference

Please see key messages below and download the presentation that we will explain tomorrow in our BBVA Client Conference in Bordeaux.

Macro & Politics:

1. Resilient US data with anchored inflation & tariff risks overdone;
2. Public spending & tax cuts underway;
3. Geopolitical noise relatively muted;
4. More dovish new Fed Chair expected.

Market dynamics:

1. Liquidity at all-time highs;
2. Shortage of new equity supply;
3. USD potentially weakening further;
4. Bullish institutional positioning.

Equity valuations:

1. The sharp rerating in the US market mostly due to AI thematic. Stretched IT valuation;
2. Aggressive 3Q25 & 2026 IT EPS growth expectations – the bar is high;
3. Outside US IT, EPS expectations and valuations are more reasonable.

Consequences – our Equity Strategy

1. US IT deserves a KitKat: short-term underperformance vs. other US sectors & Europe with a more realistic 3Q earnings bar;
2. ‘Buy-the-dips’ remains in place. Secular bull continues.

Base MSCI USA @ 6,500 – Bull @ 7,000 increasingly likely