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What’s your excuse now?

The biggest theme in public markets over the last decade has been the complete and utter dominance of American companies.

The Goldman Sachs 2025 Outlook has some incredible charts and data n this topic that are worth sharing. We have 48 technology companies who are doing more than $1 billion in net income. The rest of the world have 35 combined!

Seven of the ten largest companies in the world are American-made. The other three are state-owned enterprises.

According to Goldman, “The market capitalization of the United States’ public equity and bond markets stands at $79 trillion and is eight times as large as that of the next country, which is Japan, at $10 trillion.”

These companies are getting bid up to historic levels because they’re doing things businesses have never been able to do. Feast your eyes on this chart from Warren Pies at 3Fourteen Research.

It’s impossible to overstate how impressive these companies are. They’re the best the world has ever seen.

Consider this face blower of a stat from Goldman: “Since 1992, earnings growth in the US has outpaced earnings in non-US developed economies by an annual average of 2.4 percentage points.”

Most of the world is barely earning more than they were prior to the pandemic. The U.S. looks like an unstoppable freight train.

Not only are we growing earnings faster, but we’re doing it with less volatility.

And so because we have such fantastic businesses, especially compared to the rest of the world, foreign investors are all in on U.S. stocks. They plowed $1.4 trillion into our markets over the last twelve months, more than double the annual average since the GFC.

The one sided performance has driven valuations between us and the rest of the world to record levels. We’ve all seen a version of these charts before.

BUT! These charts aren’t comparing apples with apples. Goldman notes that only 1% of the U.K. market is in technology companies. Another example they cite is that energy is 5% of S&P 500 earnings, 19% of UK, and just 1% of Japan. We’re not comparing apples with apples.

They did a great job adjusting for differences in sector weights. The result is below.

The U.S. still trades at a premium to the rest of the world ex-India, but not as much as the prior chart would have you believe. Before any adjustments, the Eurozone trades at a 39% discount to the U.S. And after the adjustments, that falls to 23%. Not nothing, but maybe not as drastic as it appears at first glance.

The biggest question I have for the next decade is how does this dynamic play out? Will the U.S. continue to eat the rest of the world? Or, do we look back and laugh at how wrong consensus was?

The valuations on these companies are deservedly high, leaving very little room for error. As long as they keep exceeding expectations, investors will be fine. But if (when?) they disappoint, it’s not going to be pretty.