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One chart shows how AI will drive another decade of US stock market dominance
US companies already dominate the global stock market when it comes to size. A new chart from JPMorgan Asset Management shows that’s largely expected to continue. The firm attributes the boom to artificial intelligence.
In JPM’s 2025 Long-Term Capital Market Assumptions released on Monday, the team projected that US companies’ market cap share of the total global equity market will fall from 64% currently to 60% in 2037. Still, as seen in the chart below, the US (in green) would maintain a large lead over the estimated second-largest share of the global equity 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 US will continue to lead by market cap share as artificial intelligence benefits expand beyond a few large tech names that have dominated the market rally over the past year to companies in various industries.
Issar gave two reasons for the prediction: revenue production and margin improvement. The first will come from the money pouring into AI benefiting companies outside of Big Tech. This plays out as tech companies buy AI chips from the likes of Nvidia (NVDA), and, as they need more power, these AI operators are forced to spend with companies in the Utilities (XLU) and Energy (XLE) sectors.
As AI makes companies more efficient and eliminates the most simple work, eventually cutting down costs, US corporates should get a boost to profit margins.
“It’s going to be the US predominantly, and then obviously Europe will follow, because you’re starting to see some adoption there,” Issar said.
To put the current US dominance in perspective, just Nvidia’s (NVDA) market cap alone is larger than most other G7 countries, Apollo chief global economist Torsten Sløk wrote in a research note on Thursday. (Disclosure: Yahoo Finance is owned by Apollo Global Management.)
To be sure, Sløk noted that this could be a risk to the market overall.
“Global equity markets, including retirement allocations to equities, are basically leveraged to Nvidia,” Sløk wrote. “Let’s hope the value of Nvidia doesn’t decline significantly.”
Others have a more sanguine view of the AI superpower’s dominance, though. In a recent research note detailing why the S&P 500 (^GSPC) could average more than 10% annual returns over the next decade, DataTrek Research co-founder Nicholas Colas pointed to the US being at the forefront of AI adoption and well positioned to dominate amid the technology’s “global adoption.”
Story continues
Colas wrote the odds that a non-US tech company will rise over the next decade and unseat the large tech companies currently driving the US market share like Apple (AAPL), Nvidia, Microsoft (MSFT), Amazon (AMZN), Alphabet (GOOGL, GOOG), and Meta (META) are “almost zero.”
“The US continues to dominate global venture capital,” Colas wrote. “If a new US business does eventually threaten their preeminence, then it will certainly go public, be in the S&P 500, and drive future returns.”
The national flag is installed for a campaign rally of former US President and Republican presidential candidate Donald Trump outside of Christ Chapel in Zebulon, Georgia, on Oct. 23, 2024. (YASUYOSHI CHIBA/AFP via Getty Images) (YASUYOSHI CHIBA via Getty Images)
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
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