German DAX Edge Up: What AI Layoffs & Rising Import Prices Mean for Your Portfolio

• AI‑related job cuts are testing the resilience of Germany's tech heavyweights.
• Import prices rose 1.1% MoM – the strongest gain since Jan 2025 – pressuring margins.
• Energy costs fell sharply YoY, creating a mixed‑signal environment for industrials.
• Unemployment steadies at 6.3% despite three years of weakness, hinting at labor‑market tightness.
• Key winners (Scout24, Deutsche Telekom, Siemens Energy) offer upside; laggards (BASF, MTU Aero Engines) signal caution.

Most investors ignored the AI‑layoff ripple – that was a mistake.

Why AI‑Related Layoffs Are Shaking German Tech Stocks

Germany’s leading technology firms have felt the sting of artificial‑intelligence driven workforce reductions. Scout24 (+2.7%), Deutsche Telekom (+2.5%) and Siemens Energy (+2.1%) bucked the trend, but the broader sentiment is cautious. AI automation promises higher productivity, yet the immediate impact on earnings guidance can be unsettling. A flat‑earnings forecast from BASF triggered a 2% drop, illustrating how the market penalises uncertainty even when cost‑saving measures are announced.

For investors, the key is to differentiate between short‑term headwinds and long‑term tailwinds. Companies that can redeploy displaced talent into higher‑value AI projects often emerge stronger, while those that simply cut staff without a clear strategic roadmap may see margin erosion.

Import Price Surge: Ripple Effects Across Industrials

Germany’s import price index jumped 1.1% month‑on‑month in January, matching the peak seen in January 2025. Economists had penciled in a modest 0.6% rise, so the surprise points to supply‑chain pressures and a modest re‑acceleration of global demand.

Higher import costs affect every sector that relies on foreign components – from automotive (MTU Aero Engines) to chemicals (BASF). The immediate translation is tighter gross margins, especially when the year‑on‑year figure remains negative (‑2.3%). However, the sharp 21.1% YoY plunge in energy prices offers a counterbalance for energy‑intensive firms like RWE (+1.35%) and Heidelberg Materials (+1.2%). The net effect is a nuanced risk‑reward profile that savvy investors can exploit.

Competitor Landscape: How Peers Are Reacting

While the DAX’s modest 0.25% gain reflects optimism in a few bright spots, peers across Europe are charting divergent paths. French CAC 40 constituents such as LVMH and Schneider Electric have been buoyed by robust luxury sales and green‑energy contracts, respectively. In the UK, the FTSE 100’s energy stocks have struggled as domestic gas prices remain volatile.

In Germany, the winners are firms with diversified revenue streams and clear AI roadmaps. Scout24’s digital marketplace platform is leveraging AI for better matchmaking, which justifies its 2.7% rally. Conversely, MTU Aero Engines’ near‑2% decline signals that its exposure to aerospace cycles, combined with higher import costs for precision components, is weighing on investors.

Historical Perspective: DAX Moves After Past Economic Shocks

Looking back, the DAX has survived three major shocks in the last decade: the 2015 Chinese slowdown, the 2020 pandemic, and the 2022 energy crisis. Each time, a brief dip was followed by a rebound once policy support and corporate adaptation took hold.

During the 2020 COVID‑19 crash, the DAX fell 15% in March but recovered by September, led by tech and pharma stocks that quickly pivoted to digital services. The pattern suggests that today’s modest gains could be the first leg of a longer upward trajectory, provided AI integration and import‑price pressures are managed.

Key Economic Indicators Shaping the Landscape

Unemployment: The seasonally adjusted rate held steady at 6.3% in February 2026, a sign that the labor market is still absorbing the shock of AI‑related layoffs. The non‑seasonally adjusted figure fell by 14,700, indicating marginal improvement.

Energy Prices: A 21.1% YoY decline in energy costs is a double‑edged sword – it reduces input costs for manufacturers but also depresses revenue for traditional energy utilities.

Import Prices: The 1.1% MoM rise is the biggest since January 2025, hinting that global inflationary pressures are re‑emerging, albeit moderated by lower energy costs.

Investor Playbook: Bull vs. Bear Cases

Below is a concise decision framework to help you position your portfolio.

• Bull Case:
  • AI integration accelerates productivity, lifting margins for tech‑heavy firms.
  • Energy price collapse continues, offsetting higher import costs for industrials.
  • German fiscal policy maintains supportive stimulus, keeping the DAX’s upside potential alive.
• Bear Case:
  • Persistent import‑price inflation squeezes margins across the board.
  • AI layoffs translate into slower revenue growth if firms cannot quickly monetize new technologies.
  • External shocks (e.g., geopolitical tensions) reignite energy price volatility.

For a balanced approach, consider overweighting companies that are both AI‑savvy and less exposed to import‑price volatility—such as Deutsche Telekom and Siemens Energy—while trimming exposure to pure‑play manufacturers like BASF that lack clear AI roadmaps.

Stay vigilant: monitor monthly import‑price releases, AI‑related hiring trends, and energy‑price trajectories. These three data points will likely dictate the next leg of the DAX’s movement.