Germany investment gap persists despite government summit and corporate pledges

German Chancellor Friedrich Merz opened an investment summit attended by approximately 200 investors, including BlackRock CEO Larry Fink and Nvidia CEO Jensen Huang, but did not disclose a total investment figure. Amazon pledged to invest over €16 billion in Germany next year, with one-third allocated to data centers in Frankfurt. Despite this, Goldman Sachs baskets of German domestic and fiscal beneficiaries have underperformed the DAX by 6 percentage points since January, with both baskets down roughly 3%. Analysts remain highly optimistic, with 562 buy recommendations versus 76 sell recommendations in the fiscal basket. Goldman Sachs forecasts German GDP growth of 1% in 2026, 1.1% in 2027, and 1.3% in 2028. Specific stocks identified with high upside potential include Rheinmetall (50% potential), Vorwerk (40% potential), Norma Group (35% potential), and Heidelberg Materials (38% potential), driven by infrastructure spending and AI-related industrial demand. The disconnect between corporate pledges and market performance suggests investors are waiting for tangible fiscal implementation.