DWS Chief Stefan Hoops suggests that the high valuations of AI companies could lead to significant losses for some individual stocks. Speaking to the “Frankfurter Allgemeine Zeitung”, Hoops stated, “It is hard to imagine that everyone in this AI value chain can win.” Over the next twelve months, it will become clear who the winners and losers will be. He also views a ten percent decline in the stock market as a possibility, though he does not anticipate a crisis of confidence similar to the past financial crisis. He noted that banks are much more stable today, and the private sector does not face a comparable level of over-indebtedness. However, high government debt remains a medium- to long-term issue.
Despite the general pessimistic mood, Hoops remains optimistic about the German economy. He points to growth, significantly increased order inflows, more start-ups, and the DAX reaching a record high as indicators of an improving economic situation. He advises that Germany needs to reduce bureaucracy, increase flexibility in the labor market, and reform the pension system. Furthermore, Germany should focus its AI efforts more intensely on industrial applications.
Regarding the upcoming election in Saxony-Anhalt, Hoops acknowledged that the AfD poses a problem. He characterized the political strategy of attracting people to their side using shortened, simplified messages as irresponsible. He questioned whether the issue is as critical in Saxony-Anhalt as it is portrayed. He understands that the topic is important given the multitude of challenges facing the region, but he wonders if it should be regarded as the biggest problem.
