Global Equity Boom: A Shift in Market Dynamics
In recent discussions about the extensive global equity boom, a crucial aspect is often overlooked. Over the last 18 months, as the boom approaches its climax, international markets have significantly outperformed the United States.
Since the start of 2025, equity markets in emerging economies have yielded 68% returns. Europe saw 45%, and Japan recorded 44%, while the U.S. lagged with only 26%. The anticipation of major IPOs from Anthropic, SpaceX, and OpenAI is expected to impact the U.S. market’s relative performance further.
Despite these figures, the U.S. remains a leader in the global A.I. sector. The prevailing narrative in financial circles is marked by American exceptionalism. Many investors remain steadfast in their belief that the U.S. is the core of global capitalism and that its technological dominance is unassailable. Why does this notion endure?
Historical patterns play a role. Foreign markets have trailed the U.S. for so long that they are often disregarded. While the U.S. consistently reached new peaks, European equities only recently matched their 2007 highs, preceding the financial crisis. Japan’s Nikkei surpassed its 1989 bubble peak just in 2024, marking a 35-year trajectory. Even broad emerging market indexes have, after two decades, finally entered new territories.
It seemed inevitable for global markets to catch up eventually. However, the upward movement in foreign markets isn’t merely about closing the gap. Corporate profits and earnings across all major geographical regions were exceptionally strong in 2025. This strength is largely influenced by the global A.I. infrastructure construction boom.
Understanding this requires analyzing how funds for A.I. are utilized once they leave the U.S. technology companies responsible for driving this boom.
Many perceive A.I. as an exclusively American narrative. Nonetheless, the physical development of A.I. relies on a globally complex supply chain. Central to this is a unique triad: Nvidia’s chip designs from California, ASML’s precision lithography equipment from the Netherlands, and TSMC’s manufacturing facilities located in Taiwan, Japan, China, and America. These three companies collectively dominate the advanced A.I. chip production market.