Rushabh Amin, Senior Portfolio Manager at Allspring Global Investments, reflects on 250 years of American independence and the structural strengths underpinning the US investment landscape, the opportunities emerging from the AI investment cycle, and the importance of diversification as market leadership evolves.
Amin comments: “The US remains the deepest and most liquid equity market globally, underpinned by structural advantages that are unlikely to fade. Around 60% of the population has exposure to equities, and roughly a third of non-pension wealth is held in direct investments, materially higher than in Europe (approximately 20%) and the UK (approximately 10%). This supports a self-reinforcing equity culture alongside a robust and largely unmatched start-up ecosystem.
“That said, leadership does rotate. In the early 2000s, MSCI Emerging Markets returned 276% versus 0% for the S&P 500, with the 2010s reversing this trend. The 2020s are beginning to show early signs of catch-up. At an aggregate level, US earnings expectations remain reasonable, with consensus EPS growth of around 11–14% annually over the next three years.
“Valuations at approximately 21.5x earnings, or approximately 20.6x on a sector-adjusted basis, are not extreme, particularly when accounting for concentration and the shift toward capital-light models. However, the AI buildout is driving a new capex cycle, rising from $449bn in 2025 to an estimated $823bn in 2026. This raises questions on returns while also creating opportunities. Hyperscalers accounted for roughly one-third of S&P 500 capex in 2025, and this could approach half at current run rates.
“Capital markets activity remains strong. Equity issuance in 2026 has already surpassed 2021’s SPAC-driven peak, with over $250bn raised. Credit markets are equally active, with investment-grade issuance exceeding $180bn by June and high yield reaching $219bn year to date, versus $393bn for full-year 2025. While valuations at issuance are becoming harder to justify, this reflects the strength of demand, particularly from retail investors. As in previous cycles such as telecoms, it is unlikely that all those building the infrastructure will be the long-term winners.
“The opportunity set is evolving. Beyond mega-cap technology, value is emerging further downstream across AI enablers and beneficiaries, as well as in sectors leveraged to the buildout. We see particular opportunity in US healthcare and biotech, and in industrials benefiting from reshoring and advanced manufacturing.
“With just 3–4% of stocks historically driving most returns, diversification remains critical. We favour a barbell approach combining AI exposure with real-economy assets such as commodities, particularly against a backdrop of deglobalisation and more volatile inflation. While the US remains the centre of innovation, global markets offer complementary downstream opportunities as these themes play out.”
