US companies already dominate the global stock market in terms of size. A new chart from JPMorgan Asset Management shows that this is expected to largely continue. The company attributes the boom to artificial intelligence.
In JPM’s 2025 long-term capital market assumptions released on Monday, the team forecast that the market share of US companies in the total global stock market will fall from 64% currently to 60% in 2037. Still, the chart below shows that the US (in green ) would maintain a large lead over the estimated second largest share of the global stock market, China (in red).
JPMorgan Asset Management’s global head of multi-asset and portfolio solutions Monica Issar told Yahoo Finance during a media roundtable on Monday that the U.S. will continue to lead in market capitalization as the benefits of artificial intelligence expand beyond a few big tech names driving the market have dominated rallies over the past year to companies across several sectors.
Issar gave two reasons for the forecast: revenue production and margin improvement. The first will come from the money flowing into AI, benefiting companies outside of Big Tech. This plays out when tech companies buy AI chips from the likes of Nvidia (NVDA), and because they need more power, these AI operators are forced to spend money on companies in the utility (XLU) and energy (XLE) sectors.
Because AI makes businesses more efficient and eliminates the simplest work, ultimately lowering costs, U.S. businesses should see a boost to their profit margins.
“It’s going to be mainly the US, and then obviously Europe will follow because you’re starting to see some adoption there,” Issar said.
To put the current US dominance into perspective, Nvidia’s (NVDA) market capitalization alone is larger than that of most other G7 countries, Apollo chief economist Torsten Sløk wrote in a research note on Thursday. (Disclosure: Yahoo Finance is owned by Apollo Global Management.)
To be fair, Sløk noted that this could be a risk for the market as a whole.
“Global equity markets, including pension allocations to equities, are in principle used for Nvidia,” Sløk wrote. “Let’s hope Nvidia’s value doesn’t drop significantly.”
Others, however, have a more optimistic view of the AI superpower’s dominance. In a recent research note outlining why the S&P 500 (^GSPC) could achieve an average annual return of more than 10% over the next decade, Nicholas Colas, co-founder of DataTrek Research, pointed out that the U.S. is leading the way of AI adoption and are well positioned to dominate. amid the ‘global adoption’ of the technology.
Colas wrote that there is a good chance that a non-US tech company will emerge over the next decade and overtake the major tech companies currently capturing US market share, such as Apple (AAPL), Nvidia, Microsoft (MSFT), Amazon (AMZN), Alphabet ( GOOGL), will dethrone. , GOOG) and Meta (META) are “almost zero.”
“The US continues to dominate global venture capital,” Colas wrote. “If a new American company ultimately threatens their preeminence, it will certainly go public, enter the S&P 500 and drive future returns.”
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
Click here for an in-depth analysis of the latest stock market news and events affecting stock prices
Read the latest financial and business news from Yahoo Finance
