ABB: Heading into Fall with Momentum

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  Wolfgang Hagl
  Redaktor

The so-called AI trade lost momentum over the summer. Stocks linked to the artificial intelligence megatrend came under pressure. Profit-taking and doubts about the sustainability and monetization of this technology weighed not only on the leading AI stocks, particularly chip manufacturers. Companies responsible for the necessary infrastructure also faced a tough time. Among this group is ABB. On June 22, the Zurich-based industrial group’s stock reached an all-time high of CHF 89.14. From that peak, the large-cap stock fell by as much as 15% within a little over five weeks.

Plugged In

Selling pressure has eased in the CHF 76 range. At this level, ABB has now formed a double bottom, setting the stage for a new upward move. Following several strong trading days, the stock has managed to close in on the short-term downtrend. Fundamentally, ABB’s second-quarter 2026 results once again demonstrated how the megatrends of electrification and automation are working in the company’s favor. Order intake rose by 30% to a record high of USD 12.04 billion. In the Electrification segment, the strong expansion of data centers drove growth of as much as 60%.

The earnings report was overshadowed by a takeover: ABB plans to acquire industrial equipment supplier Rotork for approximately USD 5.5 billion. The British company’s electric actuators and flow control systems are used in the oil, gas, chemical, and water industries. With this transaction, ABB would complete the largest acquisition in its history. “We value operational excellence, technological quality, and customer trust,” CEO Martin Wierod enthused about the potential subsidiary. However, these qualities come at a price: ABB’s offer is about 60% above Rotork’s average share price over the three months prior to the bid.

Short-Term Trading Opportunity

Even after the most recent correction, ABB stock is still not a bargain. Based on expected earnings for 2028, the price-to-earnings ratio stands at 23.5. This means the SMI-listed stock commands a premium of nearly a quarter compared to its German rival, Siemens. However, this does nothing to diminish ABB’s short-term appeal. In general, the AI trade is picking up steam again. Among others, Nvidia and the U.S. server supplier Dell have managed to dispel some of the doubts that arose over the summer. For ABB, the immediate priority is to break above the downtrend. If it succeeds, the CHF 84–85 range would open up as the next key level.

Investment Solution

The company itself could provide a positive boost even before its next earnings report, scheduled for October 20. ABB will host a webcast on September 24. Several top executives will then present the Zurich-based company’s latest technologies and solutions for AI-driven data centers, thereby underscoring the company’s connection to this megatrend. This event adds extra appeal to a short-term trade in ABB. The strike price of the call warrant ABBJGZ is CHF 80. This means the ZKB warrant is trading at the money. The product offers a decent opportunity to speculate on a continuation of the rebound. Of course, the risks should not be underestimated. If ABB bounces off the downtrend and turns downward, disproportionately large losses could result.