AI investment is widening the US market’s lead over Europe
The S&P 500 is up 13.5% this year, but an index excluding AI-related stocks has slightly trailed Europe’s STOXX 600.
Key takeaways
- The S&P 500 has gained roughly 13.5% since Jan. 1.
- An AI-excluding US index rose 5.5%, compared with 5.6% for the STOXX 600.
- Goldman Sachs says over half of Europe’s expected AI-related growth impulse comes from investment outside the region.
The S&P 500 has gained roughly 13.5% since Jan. 1, but an index of US stocks excluding AI-related companies is up 5.5%. Europe’s STOXX 600 has risen 5.6% over the same period.
The comparison highlights how AI-linked stocks have helped lift the broader US market. The US was outperforming Europe before ChatGPT launched in November 2022, but the AI investment boom has magnified that lead, according to the article.
Europe is receiving some AI-related investment and economic benefits. Eurozone firms are expected to devote around 10% of investment to AI in 2026, according to ECB data. Goldman Sachs estimates AI investment will add roughly 0.1 percentage point to European GDP growth that year.
But more than half of Europe’s expected AI-related growth impulse comes from investments outside the region, according to Goldman Sachs. The eurozone also faces weak growth and industrial figures, alongside higher inflation.
The BNP Paribas economists cited in the article said Europe’s smaller, more fragmented capital markets can slow the spread of investment. They argued that even optimistic scenarios leave the eurozone short of the US.
This article was produced with the help of AI technology. Source: Yahoo Finance
