DNCA Invest Global New World

In September, global equity markets showed mixed performance amid an environment marked by ongoing geopolitical tensions, rising energy prices, and tighter monetary policies. In the United States, while the S&P 500 fell by only -0.5% over the month, this figure masks a sharp disparity between the rise in technology stocks on the one hand (the “Magnificent 7” up +4.2%, Nasdaq up 1.9%), and the rest of the market, which posted a sharp decline (S&P 500 equal-weighted down 4.8%, Russell 2000 down 5.3%). Outside the United States, Japan is the only market to post positive returns (+1.2% for the Nikkei 225), while Europe (-2.4% for the Stoxx Europe 600) and China (-5.6% for the CSI 300, -3.3% for the Hang Seng) posted sharp declines.

Tensions in the Middle East—including an escalation of the conflict around the Strait of Hormuz and its subsequent spread to the Bab el-Mandeb Strait—disrupted oil flows, pushing Brent crude to $98, up 6.5% for the month. Combined with positive economic indicators in the United States (composite PMI at a five-year high) and in Europe, this rise in energy prices has reignited inflationary pressures. Following the ECB’s lead, the Fed responded by raising rates by 25 basis points to 3.75%–4.00%, while signaling a likely further tightening. As a result, the U.S. 10-year yield crossed the 5% threshold for the first time since 2007, weighing on long-duration assets, particularly real estate, utilities, and high-valuation growth companies.

Among technology stocks, strong demand for artificial intelligence infrastructure continued to outweigh the negative impact of rising interest rates. The launch of Muse by Meta, followed by the “dots” persistent agents at OpenAI’s DevDay at the end of the month, confirms the gradual shift from conversational agents to tools capable of acting autonomously and continuously on behalf of users. More computationally intensive than simple chatbots, these new applications are driving up demand for inference capabilities. This surge is already evident, whether through token consumption—which has more than doubled since July—or GPU rental prices, which continue to rise. While deploying this infrastructure remains extremely capital-intensive, the upward revision of profitability forecasts for hyperscalers through 2027 suggests that the acceleration in usage is beginning to improve visibility into their monetization and return on investment.

In this context, DNCA Invest Global New World posted a return of 5.21%, underperforming its benchmark index at 5.72%.

The main contributors to performance in September were Meta (+29.7%), Advanced Micro Devices (+32.9%), and Intel (+37.4%). As mentioned earlier, Meta benefited from the successful launch of Muse, its AI agent capable of autonomously performing complex tasks, which quickly became the most downloaded app in the United States. This reception reassured investors about the company’s ability to monetize its massive investments in AI beyond its traditional advertising business. Muse’s success also led to a reassessment of the demand outlook for CPUs, which are essential for orchestrating the multiple tasks continuously performed by the agents. AMD thus benefited from its dual exposure to CPUs and TPUs, as well as new signs of strain on cloud computing capacity. Intel amplified this trend thanks to its strong exposure to server CPUs, reinforced by statements from its management that the company could meet only about half of its customers’ demand.

On the other hand, the biggest underperformers were Netflix (-12.2%), Momenta (-36.2%), and Broadcom (-2.8%). Netflix was weighed down by concerns over a slowdown in engagement (the number of hours spent on the platform) in the United States, combined with a lack of catalog updates. Momenta’s stock, meanwhile, fell sharply following its first half-year report since its initial public offering. Despite revenue growth of +76% and an adjusted loss that had nearly been eliminated, the lack of a specific timeline for profitability and the announced sharp increase in investments in R&D and computing capacity reignited concerns about cash burn. Finally, Broadcom’s stock suffered from a quarterly revenue outlook that was slightly below expectations, despite solid third-quarter results and an upward revision of its medium-term AI-related revenue targets.

In terms of portfolio moves, in September, we took partial profits on Meta, Thermo Fisher Scientific, and Okta following their recent gains. At the same time, Cerebras, Dexcom, Minimax, Toast, Veeva, and Xiaomi were removed from our portfolio.