Want to invest in US equities but not sure where to start? In this video, our Qualified Wealth Manager George Penna answers the most common questions about investing in the US stock market. From why US equities deserve a place in an investment strategy, to the impact of Artificial Intelligence and the outlook for the American market. If you prefer reading, you’ll find the full transcript of the video below.
1. Why consider US equities in your investment strategy?
US equities are the backbone of global financial markets. American companies currently account for more than half of global market capitalisation and, over time, have consistently demonstrated their ability to grow even in challenging environments.
Tariffs, monetary policy, and volatility – all these recent factors can create short-term turbulence. Yet history shows that US markets tend to absorb shocks quickly, continuing to drive global growth. With us, you can invest directly in individual shares listed on US stock exchanges, offering simple, transparent and integrated access to the world’s largest equity market.
2. What role does Artificial Intelligence play in the growth of US companies?
Artificial Intelligence has become a key driver of growth. According to research published by the Wall Street Journal, between 2023 and 2024 corporate investments in AI-related software and infrastructure contributed more to US GDP growth than household consumption.
The so-called ‘Magnificent 7’ companies – Apple, Microsoft, Alphabet, Amazon, Meta, Nvidia and Tesla – are at the forefront of this transformation. With their unrivalled capacity to innovate, they dominate key sectors such as cloud computing, e-commerce and semiconductors. AI is no longer just a promise: it is already a tangible factor driving earnings and productivity. If you are interested in this sector, we have created a special collection where you can find the main AI-related stocks.
3. Do record profits justify the cost of US equities?
Valuations remain high, but they are not without foundation. In Q2 2025, around 81% of US companies beat earnings expectations, while 69% exceeded revenue forecasts. Average earnings growth was 12.6% year-on-year, well ahead of initial estimates.
The Magnificent 7, in particular, delivered average earnings growth of 26%, more than double the Standard & Poor’s 500 average, the most important American stock market index. Admittedly, high Price-to-Earnings multiples (the ratio of a share’s price to its earnings) call for caution, but strong balance sheets and significant cash generation provide a solid underpinning for valuations, but as we know past returns aren’t a reliable indicator of future performances.
4. Why invest in US equities with Moneyfarm?
We give you access to the US stock markets through DIY Investing via multiple products (Stocks&Shares ISA and GIA), with many advantages:
- Control – with simple pricing and integrated analytics.
- Structure – we simplify tax reporting with an automatic W-8BEN form for the IRS and a clear summary of your gains, dividends and income to make your UK tax return straightforward. And if held in your ISA DIY portfolio, it’s tax free.
- Foreign Exchange simplicity – buy US stocks in GBP with transparent automatic currency conversion.
- All in one place – combine individual shares, ETFs and managed funds within one account.
You can also invest in special collections designed and monitored by the Moneyfarm Asset Allocation team, to explore the markets easily and make informed choices based on your objectives. The new special collections of American equities – Tech Titans, The AI Revolution, California Dreaming and Electric Mobility, plus one dedicated to the most recent IPOs – bring together stocks selected around a key theme, so you can focus your choices on entire sectors that are driving innovation and transforming the economy.
5. What can we expect from US equities going forward?
In the short term, uncertainties persist: tariffs, monetary policy, and market concentration can all contribute to volatility. However, structural trends are still supportive: technological innovation, corporate earnings, and resilient consumption.
In summary, we expect the US market to be cyclically volatile but underpinned by robust fundamentals that confirm this asset class as a cornerstone of global portfolios.
Important Information: The value of investments can go down as well as up, and you may get back less than you invest. Past performance is not a reliable indicator of future results. Thematic investments (such as technology or AI-focused portfolios) may be more volatile and concentrated than a diversified portfolio. Returns from US investments may be affected by currency fluctuations. Nothing in this article should be taken as investment advice or a personal recommendation. Any views expressed are for information only and may change without notice. Tax treatment depends on your individual circumstances and may change in future. If you are unsure about the suitability of an investment, please seek independent financial advice.
*As with all investing, financial instruments involve inherent risks, including loss of capital, market fluctuations and liquidity risk. Past performance is no guarantee of future results. It is important to consider your risk tolerance and investment objectives before proceeding.
