A chart shows how AI will drive another decade of US stock market dominance
US companies already dominate world stock markets in terms of size. A new chart from JPMorgan Asset Management shows that this is largely expected to continue. The firm imposed the artificial intelligence boom.
In JPM's 2025 Long-Term Capital Markets Projection released Monday, the team estimates 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) will maintain a large lead over China (in red), with an estimated second-largest share of the global equity market.
Monica Isser, global head of multi-asset and portfolio solutions at JPMorgan Asset Management, told Yahoo Finance during a media roundtable on Monday that the benefits of artificial intelligence will continue to lead in US market cap share as some of the big tech names dominate the market. Gathering of companies in various industries over the past year.
Issa gave two reasons for the forecast: revenue generation and margin improvement. The first will come from money pouring into AI profiteering companies outside of Big Tech. This is seen 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 mundane tasks, ultimately reducing costs, U.S. corporates should increase profit margins.
“It's going to be mainly the U.S., and then obviously Europe will follow, because you're starting to see some adoption there,” Isser said.
To put current U.S. dominance in perspective, only Nvidia's ( NVDA ) market cap is larger than that of the other G7 countries, Torsten Slok, Apollo's chief global economist, wrote in a research note Thursday. (Disclosure: Yahoo Finance is owned by Apollo Global Management.)
To be sure, Slok noted that this could be a risk for the market as a whole.
“Global equity markets are largely leveraged for Nvidia, with a leisurely allocation to equities,” Slok wrote. “Let's hope Nvidia's value doesn't drop significantly.”
Others, however, have a clearer view of the dominance of AI superpowers. In a recent research note detailing why the S&P 500 (^GSPC) could average annualized returns of more than 10% over the next decade, DataTrek Research co-founder Nicholas Collas pointed to the U.S. as well positioned to be at the forefront of AI adoption and dominate. Among the “global adoption” of technology.
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