FRANKFURT (DEUTSCHE-BOERSE AG) - Magnificent 7, AI and semiconductor companies, as well as crypto profiteers, dominate trading in foreign stocks. But a few others have also made it to the top of the list, specifically weight gainers and a luxury goods company.

January 17, 2025. FRANKFURT (Frankfurt Stock Exchange). Tech stocks remain the most popular in trading in foreign stocks on the Frankfurt Stock Exchange, but the sales leader in December was not Nvidia, but electric carmaker Tesla. The background: Tesla CEO Elon Musk's close relationship with the future US President Trump, from which Tesla was able to benefit. The value of Tesla shares doubled between October and December, in both US dollars and euros. On the Frankfurt Stock Exchange, the shares peaked at 465 euros in December, up from less than 200 euros in October. In the meantime, the euphoria has subsided somewhat, with the price now at 412 euros.

"Tesla still significantly overvalued"

"At the current price level, we consider Tesla shares to be a speculation and would not be surprised by further price losses," explains Torsten Tiedt of the aktienfinder.net stock platform. Despite the recent decline in the share price, the stock still appears significantly overvalued for the current fiscal year with a price-to-cash-flow ratio of almost 80, especially since the core business remains under pressure. Tesla delivered almost 20,000 fewer cars in 2024 than in 2023. "In our view, the recent increase in margins is due less to more efficient production and more to falling raw material costs," explains Tiedt. This could change at any time.

ASML: still waiting to get in?

Nvidia, which was the top-selling stock for long stretches of the year, is now in second place. Other Magnificent 7 companies are also on the list of the top-selling foreign stocksforeign stocks, specifically Amazon, Apple, Microsoft and Alphabet, as well as the AI stock Palantir, the crypto winners Microstrategy and Coinbase, and the Dutch chipmaker ASML.

ASML shares (NL0010273215) have recovered some of the heavy losses from the second half of 2024 and are currently trading at 738 euros, still well below last summer's all-time high of just under 1,021 euros. Tiedt believes that ASML is fundamentally excellently positioned - thanks to the AI boom and its dominant market position in the patterning sector. However, the tense US trade relations with China are a high risk, as China currently accounts for around one third of total sales. "With a forward P/E ratio of 30, the share has reduced its overvaluation, but due to the political risks, we would wait for a further setback before making a one-time purchase."

"The fight against obesity continues to pay off"

Few stocks from other sectors have made it onto the sales list, including the pharmaceutical companies and weight-loss injectables profiteers Novo Nordisk and Eli Lilly and France's luxury goods group LVMH. Novo Nordisk (DK0062498333) has lost 40 percent of its value since its all-time high last summer and is currently trading at 80 euros, Tiedt notes. However, this means that a P/E ratio of 22 has now been reached, which roughly corresponds to the average valuation of the past ten years. "Although the study results of the new weight loss product were rather disappointing and competitor Eli Lilly is currently ahead, the fight against obesity remains a profitable business for Novo Nordisk," emphasizes Tiedt. In addition, Novo Nordisk is and remains the world market leader in diabetes treatment. "We believe that the share is fairly valued after the correction and, thanks to a forecast of annual profit growth of a good 20 percent for the next two years, we expect the share price to rise significantly in the medium term."

LVMH: "Benefiting from the global rise in prosperity"

LVMH has been struggling for some time now during the pandemic. The stock is now trading at 690 euros, compared to a peak of over 900 euros in April 2023. Jonathan Neuscheler of the equity research and financial education platform Abilitato considers the stock to be exciting – but more for investors thinking long term. He sees some challenges for the coming quarters. Due to the significant increase in the cost of living, many consumers are prioritizing their spending differently. "The operating margin could weaken even further," says Neuscheler.

Another important aspect is the dependency on the Chinese market. There, the purchase of Western luxury brands is increasingly being viewed critically. In other sectors – such as cars and smartphones – the Chinese have always been more likely to choose local alternatives. In addition, the valuation, with an estimated P/E ratio of 22, is not particularly favorable in view of the risks. In the long term, however, the share offers opportunities: "LVMH offers a great opportunity to benefit from the trend of rising global prosperity," Neuscheler is convinced. Another plus point: the broad portfolio, which almost matches the diversity of a luxury ETF.

By Anna-Maria Borse, January 17, 2025, © Deutsche Borse

(Deutsche Borse AG is solely responsible for the content of the column. The contributions are not an invitation to buy or sell securities or other assets.)