(Bloomberg) -- Global investors are expressing doubt about a European equity rally as they wait for Germany to deliver on its promise of sweeping fiscal reform, according to Goldman Sachs Group Inc. strategists.

In an interview with Bloomberg, strategists Sharon Bell and Christian Mueller-Glissmann said money managers had voiced concern about Europe falling behind at a time when artificial intelligence is boosting US equities and China is outperforming in emerging markets.

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“Europe has moved to the bottom of the shopping list because there’s so many other regions that are showing better momentum,” said Mueller-Glissmann. “Everyone is quite skeptical about whether Europe will spend the money,” added Bell. “There is a feeling of ‘I want to actually see it as opposed to just being told that it’s going to happen.’”

Europe’s Stoxx 600 Index had outperformed US peers by a record in dollar terms in the first quarter as Germany — the region’s biggest economy — pledged hundreds of billions of euros for defense and infrastructure investments. The move represented a dramatic shift for a country that’s been known for ironclad controls on government borrowing.

However, the benchmark has given up its lead in recent weeks with investors flocking back into US assets on signs of resilient economic growth and expected interest-rate cuts. Renewed enthusiasm around AI is also powering technology heavyweights. The S&P 500 has rallied 12% to a record this year, while the Stoxx 600 is up 8.6% and below its March peak.

A recent survey by Bank of America Corp. found allocation to European equities slipped in September. On the other hand, fund managers aren’t outright pessimistic either, with the poll showing no participant expects declines of more than 5%.

The two Goldman strategists said that despite skepticism about Germany’s proposed spending program, the plans provided a fiscal anchor making investors “less worried about extreme downside scenarios” for the region.

Germany envisages spending hundreds of billions of euros modernizing roads, bridges and the armed forces in moves that should boost output. Some investors have questioned when the promise of massive stimulus will translate into company profits. Critics also suggest that parts of the money might be used as a substitute for states’ budgets rather than fuel additional investment.

“I hear a lot of clients saying the chance of negative rates in Europe in the next decade is very, very low, which is good for banks,” Mueller-Glissmann said. “You do definitely see people recognizing that the fiscal support is there, but they’re not willing to pay for the bullish scenario.”

Bell expects corporate earnings to rise by 4% and 6% in the next two years, respectively, supported by improving economic growth. She forecasts the Stoxx 600 will rise by about 5% in the coming 12 months.

“If Europe delivers on three-quarters of its promises, I would say the market will do very well,” Bell said.

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