In the past 18 months, international equity markets have seen impressive growth, significantly outpacing the United States. Since the beginning of 2025, emerging economies have yielded returns of 68%, Europe 45%, and Japan 44%, compared to the U.S. equity market’s 26%.
Despite the U.S. leading the global A.I. industry, the narrative in financial markets often centers on American exceptionalism. Many investors believe the U.S. remains the engine of global capitalism due to its technological lead. Historical trends contribute to this perception. Foreign markets have trailed behind the U.S. for years, and while the U.S. market has continually achieved new highs, European equities only recently surpassed their 2007 peak from before the global financial crisis. Japan’s Nikkei took 35 years to eclipse its 1989 bubble peak, achieving this milestone in 2024. Emerging markets have finally broken past two decades of stagnation.
It was predicted that global markets would eventually catch up, but the surge in foreign markets isn’t merely about catching up. In 2025, corporate profits and earnings have been robust across various regions. A major factor is the global A.I. infrastructure construction boom. Understanding the impact requires examining the allocation of money spent on A.I. projects beyond U.S. technology companies’ balance sheets.
A.I. is often viewed as an American-centric tech story, but its development relies on a global supply chain of remarkable complexity. Central to this are Nvidia’s chip designs from California, ASML’s precision lithography equipment from the Netherlands, and TSMC’s manufacturing facilities in Taiwan, Japan, China, and America. These three companies dominate advanced A.I. chip production.
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