Smothering Heights

J.P. Morgan Asset Management

Michael Cembalest

Research

53 Pages

From 2009 to 2024, the S&P 500 generated 3.6x the return of the MSCI World ex-US Index. In 2025 the US finally underperformed most equity markets, leaving the S&P 500 vs rest of world multiple since 2009 at 3.0x.

Date published: January 1, 2026

Key Takeaways

AI concentration risk: Market leadership is narrow, so a sentiment shift can ripple through the whole index.
Capex reality check: Massive spending can stay rational, yet profit payback may disappoint.
Moat vulnerability points: Power constraints, China, Taiwan, and hyperscaler margins sit at the center.
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