By Silvano Grimaldi, CEO of the independent asset management firm Grimaldi & Partners AG.
Monthly Review
International equity markets ended August 2025 with gains.
Main Market Drivers
- Increased probability of interest rate cuts: Weaker labour-market data and declining inflation rates raised expectations of forthcoming Federal Reserve rate cuts, supporting risk assets.
- Strong Q2 corporate results, particularly in technology, cloud computing and artificial intelligence: Many large companies exceeded expectations. Strong cloud and AI revenues prompted upward revisions to earnings forecasts.
- Easing trade-policy tensions between the United States and the European Union: Progress on the transatlantic trade framework reduced tariff uncertainty and improved sentiment towards export-oriented sectors.
- Continued AI and technology rally: Ongoing investment in AI infrastructure and semiconductors supported the outperformance of the technology sector, helping to drive the major indices higher.
- Weaker US dollar and capital flows into international equities: The decline in the US dollar made foreign equities more attractive to global investors and reinforced gains in international markets.
Stock in Focus
Intel Rallies 25% in August as AI and Foundry Momentum Supports the Chipmaker
Intel gained 25% in August, supported by several political and industrial catalysts linked to artificial intelligence and semiconductor manufacturing.
Intel and the US government announced a “historic agreement”, under which the United States would invest USD 8.9 billion in an equity stake of approximately 10% in Intel. The objective is to strengthen domestic semiconductor production.
Intel also reported the early receipt of USD 5.7 billion in CHIPS Act funding. At the same time, Washington stated that the overall package was still being finalised. Nevertheless, the message to the market remained clear: additional capital and political support would help secure Intel’s investment programme.
The company further supported the investment case with its Q2 results published on 24 July and its guidance for Q3.
Intel forecast revenue of between USD 12.6 billion and USD 13.6 billion, targeted a break-even non-GAAP earnings per share result, introduced stricter cost controls and planned approximately USD 18 billion in capital expenditure to accelerate its technology roadmap.
Intel also emphasised that the government’s new equity investment would allow the foundry division to remain within the group, providing an important signal to customers and business partners.
The combination of government funding, improved visibility for manufacturing investment and solid corporate guidance changed market sentiment and pushed Intel shares to the top of the sector.
The next important developments will include the final details of the government agreement, progress on Intel’s CPU and AI roadmap, and the Federal Reserve meeting in mid-September.
Outlook – September 2025
Opportunities
- Central-bank support: Dovish guidance or a possible Federal Reserve interest rate cut at its meeting on 16–17 September could support equity valuations. The ECB meeting on 10–11 September and the Bank of England meeting on 18 September will also be closely monitored.
- Disinflationary economic data: The US CPI release on 11 September and the eurozone flash HICP release on 2 September could increase the probability of earlier or additional interest rate cuts if inflation continues to weaken.
- Easing pressure from energy prices: OPEC+ plans to increase production by approximately 547,000 barrels per day in September, with a meeting scheduled for 7 September. Higher production could place downward pressure on oil prices and support margins in non-energy sectors.
Risks
- Economic data that remains “too hot”: A stronger-than-expected US employment report on 5 September or persistently high inflation could discourage the Federal Reserve from easing monetary policy and place pressure on risk assets.
- US budget dispute and government-shutdown risk: Political gridlock ahead of the 30 September deadline could increase uncertainty and trigger a risk-off environment.
- Oil-price shock: A change in OPEC+ policy or supply disruptions involving Russia or the Middle East could increase energy prices and place downward pressure on corporate earnings estimates.
Performance Expectations
For September 2025, we expect an overall neutral trend, with equity markets likely to move sideways and experience periods of volatility.
Stock Recommendation: Intel
This publication is provided for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any financial instrument. Past performance is not indicative of future results.
