Geopolitical tensions typically bring good buying opportunity, Barclays says

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Geopolitical tensions typically bring good buying opportunity, Barclays says

Sam Boughedda

Fri, February 20, 2026 at 11:47 PM GMT+9 1 min read

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Investing.com – Barclays told investors in a note Friday that they should view the latest geopolitical flare-ups as potential entry points, arguing that markets remain supported by solid economic and earnings fundamentals.

Analyst Emmanuel Cau wrote that “US-Iran tail-risks have increased lifting the oil risk premium,” but added that “geopolitical flare-ups typically bring good buying opportunity, amid supportive macro & earnings fundamentals.”

According to Barclays, volatility tied to artificial intelligence has eased. “AI hysteria has calmed down,” Cau said, though “growing Tech caution continues to fuel rotation into Europe.”

The bank noted that single-stock volatility has moderated after “sharp and erratic rotations earlier in Feb,” allowing dip buyers to return.

Barclays noted that it had previously warned that “AI hysteria was looking increasingly overdone,” and recent market moves suggest investors are beginning to reassess indiscriminate selling.

The bank highlighted that parts of the market now look tactically attractive. It said “Global Tech sector valuations have compressed meaningfully,” with relative valuation levels “at their lowest… post-Covid period.”

Despite ongoing concerns about AI-led disruption and hyperscaler capex spending, the bank believes earnings momentum remains resilient and that risk-reward has improved.

Those tech-related concerns are also said to be driving rotation into what Barclays called “old-economy/ hard asset sectors,” contributing to a continued shift from the United States to the rest of the world.

EU equities have extended their year-to-date lead, supported in part by rebounds in sectors caught up in the earlier “AI panic.”

Looking ahead, Barclays feels Nvidia’s upcoming results will be a key catalyst that “may deepen or reduce the current Big Tech uncertainty.”

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