Looking at the performance of major global stock markets in 2025, the US stock market's results are a bit embarrassing—its gains are basically the worst in the world.

From the perspective of international investors settling in USD, stock market gains mainly rely on four drivers: local currency appreciation, earnings growth per share, valuation expansion, and dividends. What's the current problem with the US stock market? EPS profits are rising, but this growth can't really lift stock prices. The reason is straightforward—valuations have already hit a ceiling, with no room to go higher.

In comparison, European stock markets performed well in 2025. The STOXX Europe Index, Spain's IBEX, Italy's MIB, Germany's DAX, the UK's FTSE, Switzerland's SMI, and France's CAC all delivered solid results. Only Korea's KOSPI can hold a candle to Spain. The main driver in Europe comes from the euro's appreciation, which has brought additional returns to investors valuing assets in USD.

Interestingly, the MSCI China Index, favored by international investors, also outperformed US stocks this year. This index isn't strongly tied to the RMB; what mainly drives it? Valuation recovery. It was too cheap before, and now it's rebounding. The EPS growth momentum of the emerging markets index MSCI EM is even stronger. Even Japan's TOPIX has outperformed US stocks.

So the question is: how about US stocks in 2025? Actually, they are quite average. They can still rise by more than 10%, but the divergence is too significant. AI stocks are not a guaranteed win either; choosing the wrong stocks carries considerable risk, and investment difficulty has sharply increased.

Fundamentally, the market capitalization of US stocks has already expanded to $70 trillion. To double again? That would be $140 trillion, a number far exceeding the US GDP, which is completely unrealistic. Unless a brand new valuation theory is created—such as comparing US stock market value to global GDP—but that assumption is too stringent.