Stocks● Neutral
U.S. Market Narrowing Boosts Case for International Equities
U.S. market narrowing and AI spending concentration are shifting the case for international equities, which trade at 14x 2027 earnings vs 17x for U.S. A webcast on Aug. 20 explores non-U.S. strategies.
Continue with
The case for international equities is getting stronger as U.S. market returns increasingly depend on a handful of AI-related stocks. Only one-third of S&P 500 components have beaten the broader index this year. Large U.S. tech companies are projected to spend almost all of their operating cash flow on infrastructure in 2026, pushing up corporate debt issuance and concentrating risk.
International stocks, by contrast, trade at roughly 14 times projected 2027 earnings on an equal-weighted basis. U.S. equities sit at 17 times. The valuation gap comes with higher dividend yields outside the U.S., and non-U.S. tech companies are benefiting from shifting supply chains without taking on the same debt loads tied to domestic AI buildouts.
Thornburg Investment Management and VettaFi will host a webcast on August 20 at 2 p.m. ET to discuss how advisors can evaluate international equity exposure. Josh Rubin, a client portfolio manager at Thornburg, and Kirsten Chang, a senior industry analyst at VettaFi, are scheduled to speak. For broader stock market trends, see AlphaScala's stock market analysis.