Why AEX Index Could Push Higher: What Could Drive the Next Rally?

01. Historical Context

The AEX still has upside because price is near the highs, not because valuation is cheap

The AEX has already compounded strongly over the last decade, rising from 435.88 on 31 May 2016 to 1,010.44 on 15 May 2026, a total gain of 131.82%. Near-term upside therefore depends less on finding a depressed market and more on proving that the existing premium can be sustained. That premium is not irrational: the index has heavy weight in global leaders such as Shell, ASML, Unilever, ING, RELX, and Prosus, and those names give it direct exposure to energy cash flow, semicap demand, and information services.

Data-based bullish visual for the AEX Index — The bullish case is a continuation case, not a deep-value case: the AEX is close enough to prior highs that the next leg up needs cleaner macro data and broader earnings confirmation.

AEX framework across investor time horizons

Horizon	What matters most	What would strengthen the thesis	What would weaken the thesis
1-3 months	Inflation path and Q2 earnings tone	AEX holds above 1,000 and euro area inflation cools back toward 2.5-2.6%	Inflation stays near 3.0% and earnings commentary weakens
6-12 months	Earnings revisions and breadth	Positive Europe EPS revisions spread beyond a few leaders	Returns rely only on multiple expansion
To 2027	Whether macro growth and AI capex feed into real cash flow	ASML-led demand strength broadens and ECB policy becomes less restrictive	Energy and inflation keep rates higher for longer

The current setup is constructive but not forgiving. Yahoo Finance metadata showed a 52-week high of 1,036.02 and a 52-week low of 882.42. The index is therefore much closer to resistance than to washout levels. That means buyers need ongoing evidence that earnings can carry the benchmark higher.

Euronext's 31 March 2026 factsheet also showed top-ten concentration at 75.42% and an index dividend yield of 2.48%. The next rally is most credible if that concentration works as a quality feature rather than as a narrow-dependence risk.

02. Key Forces

Five bullish forces that could extend the move

First, earnings momentum in Europe has improved from a weak base. J.P. Morgan Asset Management wrote in its 2026 outlook for global ex-US equities that, after seven months of negative EPS revisions, Europe's 2026 EPS estimate had begun to be revised up, with bottom-up forecasts pointing to 12% year-on-year growth, although the firm said mid-single-digit growth looked more realistic. For the AEX, even the more cautious interpretation is enough to support further upside if revisions stay positive.

Second, the macro economy is weak but still expanding. Eurostat's flash estimate showed euro area GDP up 0.1% quarter on quarter in Q1 2026 and 0.8% year on year, while the euro area unemployment rate fell to 6.2% in March. That is not boom territory, but it is also not a recession backdrop. Equity rallies can continue in that environment if earnings stay intact and financial conditions do not tighten further.

Third, ECB policy is restrictive, but not tightening further for now. On 30 April 2026 the ECB kept the deposit facility rate unchanged at 2.00%. A stable rate backdrop is not the same as easing, but it is less hostile than a fresh tightening cycle. If inflation cools again, the market can reprice toward a friendlier rate path without needing a dramatic macro surprise.

Fourth, the AEX has genuine AI and capex sensitivity. Euronext's composition shows ASML at 14.69%, RELX at 6.11%, Prosus at 5.42%, ASM International at 3.67%, and BESI at 1.53%. ASML reported Q1 2026 sales of EUR 8.8 billion and said AI-related infrastructure investment was solidifying the industry's growth outlook, while ASM International said AI-led demand accelerated further in the quarter. That gives the AEX a real earnings channel into the AI buildout.

Fifth, institutional Europe strategy is positive but not euphoric. Goldman Sachs Research said on 15 January 2026 that it expected the STOXX 600 to deliver an 8% total return in 2026, supported by good global growth, falling interest rates, and 5% EPS growth in 2026 followed by 7% in 2027. That is useful because it implies the professional bull case for Europe is still based on modest earnings growth and decent macro support, not on a speculative melt-up.

Five-factor scoring lens for the rally case

Factor	Why it matters	Current assessment	Bias
Macro backdrop	Determines whether investors pay up for cyclicals and quality growth	GDP is still positive and unemployment is low, but growth is not strong	Neutral
Inflation and rates	Drives multiple support	ECB is on hold at 2.00%; April inflation at 3.0% is an obstacle but not yet a trend	Neutral
Earnings revisions	Best signal for whether the rally deserves to continue	Europe revisions have improved from negative territory	Bullish
AI-linked leadership	ASML and peers can pull the index higher	Q1 company commentary remains supportive	Bullish
Valuation	Controls room for upside if the macro backdrop wobbles	iShares AEX ETF P/E at 18.31 is fair, not cheap	Neutral

The strongest version of the bull case is therefore not a one-factor story. It is a combination of modest growth, stable rates, positive revisions, and continuing AI-linked capex demand.

03. Countercase

What could interrupt the rally

The main near-term risk is inflation. Euro area inflation rose to 3.0% in April 2026 from 2.6% in March, and Statistics Netherlands put Dutch flash inflation at 2.8% in April. If those prints prove to be more than an energy shock and begin to affect core expectations, the market will struggle to justify a richer multiple.

The second risk is that Europe growth stays too soft for breadth to improve. Euro area GDP rose only 0.1% quarter on quarter in Q1 2026, and Dutch GDP matched that pace. A rally driven only by ASML, Shell and a few defensives can continue for a while, but it is less durable than one supported by broader revisions.

The third risk is concentration. Euronext shows the top ten names at 75.42% of the index. If one of the largest leaders disappoints on guidance, the benchmark can feel weaker than the macro data alone would suggest.

Current risks to the bullish case

Risk	Latest data point	Why it matters	Current assessment
Inflation reset	Euro area CPI 3.0% in April 2026	Can keep real rates high and cap P/E expansion	Bearish
Soft GDP	Euro area GDP +0.1% qoq in Q1 2026	Raises the hurdle for broad earnings acceleration	Neutral to bearish
Valuation	AEX proxy P/E 18.31 on 14 May 2026	Leaves less room for disappointment	Neutral
Concentration	Top ten weight 75.42%	Can turn stock-specific weakness into index weakness quickly	Bearish

The bullish case remains intact only if these risks stay contained rather than cumulative. A rally can live with one of them. It becomes fragile when they start reinforcing each other.

04. Institutional Lens

What professional research implies for a further move up

Goldman Sachs Research's January 2026 Europe equity outlook called for an 8% total return in the STOXX 600 in 2026, supported by 5% EPS growth in 2026 and 7% in 2027. Goldman also noted that European stocks were not cheap in historical terms, sitting in the 71st percentile of P/E over the last 25 years. That combination is important. It says the upside case exists, but it needs earnings support because valuation alone is no longer a tailwind.

J.P. Morgan Asset Management's 2026 global ex-US outlook adds a second useful point: European earnings estimates have finally started being revised up after a long downgrade cycle, but J.P. Morgan still thinks mid-single-digit growth is more realistic than the 12% bottom-up estimate. That is effectively a warning against extrapolating too much from a single improvement in sentiment.

For the AEX, these institutional views line up well with the data. There is room for upside, but the move should be led by earnings and confirmed by breadth rather than by a large jump in valuation multiples.

Institutional lens for the bullish case

Source	What it said	Date	Read-through for AEX
Goldman Sachs Research	STOXX 600 total return of 8% in 2026; EPS growth 5% in 2026 and 7% in 2027	15 January 2026	Supports a modest Europe bull case, not a euphoric one
Goldman Sachs Research	European stocks are in the 71st percentile of P/E over the last 25 years	15 January 2026	Means AEX upside must be earnings-led
J.P. Morgan Asset Management	Europe's 2026 EPS estimate has turned positive after seven months of negative revisions; 12% bottom-up growth but mid-single digits may be more realistic	2026 outlook page crawled last month	Positive revision trend matters more than heroic growth assumptions

The common institutional message is that Europe can still rally, but the quality of the rally matters. Narrow gains and expensive multiples are less trustworthy than broader revisions and steadier inflation data.

05. Scenarios

Actionable 6 to 12 month scenarios

The scenario ranges below are author estimates based on the current AEX level, the January 2026 peak, the 52-week range, Europe macro data, and the institutional research cited above. They are not third-party price targets.

AEX next-rally scenarios

Scenario	Probability	Range	Trigger conditions	When to review
Bull	45%	1,035-1,075	AEX regains and holds above 1,027, euro area inflation cools back toward 2.5-2.6%, and Europe EPS revisions remain positive through Q2 reporting	Review after the next ECB meeting and after the main Q2 reporting window
Base	35%	975-1,035	Growth stays positive but slow, inflation remains sticky, and leadership remains concentrated	Review monthly with inflation and unemployment releases
Bear	20%	920-975	AEX loses 980, inflation stays close to 3.0%, and company commentary points to weaker demand or slower orders	Review immediately if the index breaks below 980 on volume or if revisions turn negative again

The tactical conclusion is straightforward. Buyers should want confirmation above the January high or a clean inflation improvement before assuming the next leg higher is durable. Holders can stay constructive, but the position is stronger if it is defended by revisions rather than by multiple hope alone.

If the data cooperate, the AEX can still push into new highs. If they do not, the more likely outcome is not an instant collapse but a rangebound market that forces earnings to do the heavy lifting.

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