LONDON (Reuters) - Some of Europe's most popular AI-linked stocks fell for a second day on Tuesday, after an analyst note late last week that flagged a possible slowdown by Microsoft ( MSFT ) on data centre leasing knocked sentiment ahead of make-or-break results from Nvidia ( NVDA ).

Less than a month ago the emergence of China's cheap artificial intelligence DeepSeek model triggered a global selloff in tech shares and a reassessment of how much Western companies are spending on development and key infrastructure such as data centres.

TD Cowen analysts said in a note late on Friday that Microsoft ( MSFT ) had scrapped leases for sizeable U.S. data centre capacity in the United States.

Europe has no direct equivalent to either Nvidia ( NVDA ), whose chips power a lot of existing AI capability, or Microsoft ( MSFT ), but shares in companies that are exposed to datacentres endured a second day of selling.

Microsoft ( MSFT ) has said its AI and cloud capacity investment plans remained on track.

Shares in Germany's Siemens Energy, which have soared over 600% since a low in October 2023, fell 3.5% and French electrical equipment maker Schneider Electric lost 2.5%, having dropped by 4% and 6.9%, respectively on Monday.

"The market is heavily skewed negative right now around tech sentiment with any whisper of worries/concern from DeepSeek to Microsoft ( MSFT ) capex causing a brutal ripple impact across the tech ecosystem," Wedbush tech analyst Dan Ives said.

Shares in Italy's Prysmian, the world's largest cable maker, fell 2% on Tuesday after ending Monday down 4.5%. Shares in Swiss engineer ABB were down 1%, following a 4.7% drop on Monday, when the company's management held a call with analysts.

"ABB thinks this is to allow Microsoft ( MSFT ) to 'take stock and see where we are' rather than a major inflection," Citigroup analysts said in a note following the call.

UBS said it viewed the market response as another "DeepSeek moment" in that it presented a buying opportunity, while Barclays said it may take investors some time to figure out if this latest development is specific to Microsoft ( MSFT ), or a sign of a broader shift.

Steve Wreford, lead portfolio manager/analyst on the global thematic equity team at Lazard Asset Management and co-manager of around $1.5 billion in assets said AI was still very much a "winner takes all landscape" in terms of big tech spending.

"The latest developments at Microsoft ( MSFT ) may reflect a more measured approach to data centre buildout," he said.

Tech shares have been volatile this week ahead of Nvidia's ( NVDA ) quarterly results on Wednesday that investors will scour for evidence that the company's lofty valuation is justified and the outlook for its products remains robust.