In 2026, several DAX components have lagged far behind the broader index, with some stocks trading deep below their historical peaks despite solid underlying earnings trends in Europe. While the DAX remains elevated overall, this divergence highlights how profit momentum and market sentiment can sharply diverge across individual names. For long-term investors, understanding whether these drawdowns reflect temporary discounting or fundamental shifts is key to spotting value opportunities. Analysts point to structural headwinds and cyclical weaknesses that warrant careful analysis before positioning.

At first glance, 2026 looks stable for the German stock market. The DAX index is holding relatively high, gaining 1.43% since the beginning of the year. But a look at the index itself can be misleading.

The DAX is weighted by market capitalisation, which means that its development is heavily influenced by a few of the largest companies. If big titles are growing strongly, they can mask…