AI Boom Cements US Dominance As Europe Loses Ground in Market Rankings

The artificial intelligence boom has reinforced the dominance of US companies among the world’s most valuable listed firms, while Europe continues to lose ground as investors pour money into technology stocks, according to a study by consultancy EY.

US companies accounted for 56 of the world’s 100 most valuable listed firms at the end of the first half of the year, ahead of China with 12 and the United Kingdom and Japan with five each.

Germany had just one company in the top 100, down from three at the start of the year, with Siemens ranking 72nd after SAP and Allianz slipped to 114th and 115th.

Chipmaker Nvidia topped the ranking with a market value of about $4.8 trillion as of June 30, followed by Alphabet, Apple and Microsoft.

Eight of the world’s 10 most valuable companies were based in the United States, with Taiwan’s TSMC and Saudi Arabia’s Saudi Aramco the only non-US firms in the top 10.

“We are currently witnessing a historic shift in the balance of power on global stock markets,” Henrik Ahlers, managing partner of EY Germany, said.

Companies that investors see as playing a leading role in the AI value chain, including chipmakers, cloud providers, platform operators and data centre companies, were being rewarded with substantial valuation premiums, he said.

Ahlers said Europe risked falling structurally behind in one of the world’s most important technologies because of fragmented capital markets and a weaker venture capital ecosystem.  Germany’s representation among the world’s 100 most valuable companies has fallen from seven firms in 2007 to one today, EY said, highlighting the challenge facing Europe’s largest economy.

Ahlers said Europe remained strong in industrial engineering, but stock markets were currently rewarding technology leadership above all else.