In this blog post, we discuss some of the key messages that shaped manager sentiment in the third quarter of 2025 by reviewing 146 earnings conference calls held from July to September. Positive developments in some companies, particularly those focusing on digitalization and artificial intelligence (AI), sit beside negative outlooks in energy-dependent and automotive companies. Geopolitical uncertainty remains a significant concern for executives, even though some companies are starting to adapt to this “new normal”.
The only certainty: geopolitical uncertainty
Geopolitics has become a major buzzword in the (corporate) world, with more than 80 mentions in the third-quarter earnings conference calls. Managers frequently refer to geopolitical risk in statements about conflicts, trade policy, and, in particular, export controls. Increasingly, statements reflect the persistence of high political and economic uncertainty, as well as the unlikely return to the status quo ante. In one manager’s words: “ I'm sure you're well aware of the geopolitical environment and its implications. The fragile environment in trade policies caused significant investment uncertainty. As a result, we recorded weak order intake in Q2.” Further statements highlight the necessity to follow world developments closely: “The tariff situation, as I said, this is changing day by day.”
Supply-chain exposure was also explicit, as one executive from the industrial sector expressed: “Currently, we have a huge uncertainty also in our businesses with respect to US tariffs and Chinese export controls.” The managers describe the direct impact of tariffs on their business. For example, one said: “The first half of 2025 was marked by major challenges, challenges that were not foreseeable at the beginning of the year. First and foremost, the sharp increase in U.S. import tariffs and the associated trade policy uncertainties.” He added to the statement, “After all, we cannot assume that the tariff situation is only temporary.” While the EU-US trade deal, announced on 27 July, may appease German business leaders’ appeal to the EU and US authorities for a rules-based international trade regime, it remains to be seen how the still-high protectionism may affect German companies and whether the deal can create long-term certainty in the first place.
US domestic developments also impacted listed companies in Germany in less apparent ways. For instance, a manager mentioned how research funding cuts affect the company’s sales: “Less from the tariffs, actually, but clearly from the university funding, specifically in the US… There are several universities [that] were hard hit by funding cuts. These cuts got to a level that those guys couldn't pay their electricity bills anymore. So there, I need to say, no, I got to be cautious about my US sales outlook this year.”
Executives see AI creating new business opportunities but worry about energy costs
Across calls in various industries , executives described AI as a tool they utilize in their businesses. In some calls, they explained how they provide different AI services to other companies, while in others, managers discussed using AI tools internally. For example, one manager described their efforts in utilizing AI in their internal processes: “roughly 10% of our workforce will be intensively trained on how to use AI internally for processes.”
Another manager from industrial automation announced bringing physical AI into the supply chain together with another company and explained: “[…]that is a very exciting innovation, and it's coming and developing well. The teams are working very strongly and very well together.”
Furthermore, AI shows itself in innovative product lines. An executive among AI providers emphasized rapid product innovation: “Over the past quarters, we have already introduced several truly value-adding AI features into our product portfolio such as the AI visualizer. But we are especially proud of the launch of our new groundbreaking agentic [...] assistance, one of the first of its kind [...].” Another manager tied AI demand to future revenue streams, noting: “AI remains a powerful engine of growth with infrastructure expansion and data center buildouts accelerating dynamically, aligning with our projection to achieve related revenues of around EUR600 million this fiscal year, rising to around EUR1 billion next year.”
While AI dissemination leads to positive sentiment and managers view it as an engine for future growth, its high energy consumption may be worrisome, as the last quarter's calls exhibit negative sentiment due to increasing energy costs. One manager said: “we’re facing meaningful energy cost headwinds due to increased grid fees [...].” So far, companies from the “old economy” have locked in energy supply at predictable terms and are trying to rebuild long-term energy partnerships that they lost after the start of Russia’s war against Ukraine: The agreements “will supply us with up to 23 terawatt hours of Norwegian natural gas annually for the next 10 years”.
Weak dollar: blessing or curse?
While the relative strength of the euro lowers the cost of energy imports and reduces operational costs for some companies , it diminishes the revenues that companies generate in the international markets, where the dollar remains the dominant means of payment. Managers described the companies’ achievements as follows: “despite the currency headwind, it came in at EUR18 billion.” Another executive from the financial industry voiced a similar sentiment: “Revenue growth, cost/income and RoTE were stable quarter on quarter despite headwinds from a weaker US dollar.”
So far, 2025 has been marked by remarkable uncertainty. At least domestically, some uncertainty will be resolved, as the federal government now details how it intends to spend the 500 bn euros infrastructure fund. With investment to begin in earnest next year, we expect this topic to feature prominently in reports and calls in the coming months.
Sara Fadavi is Financial Policy Analyst at the SAFE Policy Center.
Alexander Hillert is Co-Director of the SAFE Department “Financial Intermediation” and Professor for Finance and Data Science.
Vincent Lindner is Head of the SAFE Policy Center.
Blog entries represent the authors’ personal opinion and do not necessarily reflect the views of the Leibniz Institute for Financial Research SAFE or its staff.
