Matrixport Research Report | Reassessing the Long-Term Investment Value of U.S. Stocks: Institutional Policy Benefits, Industry Cycles, and Global Capital Resonance

In the current environment of heightened asset volatility, re-evaluating the core allocation value of U.S. stocks is of practical significance. Among global equity assets, U.S. stocks remain a core option for some long-term investors. This judgment is not based on a short-term bet on the macro environment in 2026, but rather on three more stable and sustainable structural drivers—compound growth built on institutional advantages, genuine demand driven by technological innovation, and the long-term migration of global capital allocation logic.

Institutional and Historical Compound Growth: An Un replicable “Underlying Architecture”

From early 2015 to the end of 2025, the Nasdaq Composite Index has increased approximately 2 to 3 times more than the ChiNext Index and the Hang Seng Tech Index. More importantly, its maximum drawdown during this period was only -36.4%, far lower than the -69.7% and -74.4% experienced by the other two indices. This indicates that in the U.S. stock market, investors can more easily realize gains through “time + compounding” rather than “market timing.”

This result is not accidental but a quantifiable reflection of institutional advantages. The U.S. capital market has built a complete innovation financing chain—from venture capital and private placements to IPOs and refinancing—allowing companies to access resources over longer cycles with lower friction, creating a positive feedback loop of “investment—growth—reinvestment.” Additionally, publicly listed companies generally adhere to cash flow discipline and shareholder return mechanisms, which strengthen the resilience of the index’s profit base amid macro fluctuations. Furthermore, the global pricing attribute of dollar-denominated assets endows U.S. stocks with inherent liquidity capacity—when risk appetite shrinks, funds flow back to safe assets; when it expands, incremental risk exposure is absorbed. This “institutional + monetary” dual moat is the fundamental reason why the power of compound growth can be continuously realized.

AI-Driven Industry Cycle: From “Valuation Imagination” to “Real Investment”

Technology giants have contributed the main excess returns in this round of U.S. stock gains. However, contrary to some market concerns about “bubbles,” we believe the current stage is a critical transition in the AI industry cycle from “infrastructure expansion” to “application penetration,” characterized by the parallel validation of real demand and real investment.

The Stanford “AI Index 2025” shows that in 2024, 78% of organizations reported using AI, a significant increase from 55% in 2023, indicating an accelerating demand-side diffusion. On the supply side, capital expenditure by U.S. AI-related listed companies increased from approximately $208.26 billion in 2019 to $384.44 billion in 2025, nearly doubling. This is not a retreat after “storytelling,” but a genuine expansion of computing power and infrastructure with real capital.

We divide the AI profit realization path into three stages: the infrastructure dividend period, the platform expansion and service realization period, and the application layer penetration and business model re-creation period. Currently, the market is still transitioning from the first to the second stage, with application penetration far from saturation. Even if leading stocks’ gains slow marginally, the cost reduction and efficiency gains brought by AI will continue to diffuse across more industries, providing broader and longer-tail growth drivers for U.S. stocks.

Global Capital Allocation: From “Transactional Inflows” to “Structural Increase”

Over the past three years, overseas investors’ holdings of U.S. equities have shown a “step-up” trend—from $14.63 trillion in 2023 to $21.59 trillion in 2025, a cumulative increase of about 47.6%. This sustained growth resembles a long-term adjustment of global institutional capital allocation weights rather than short-term chasing of gains.

Regionally, Europe contributed about 51% of the incremental increase, further confirming this as a strategic rebalancing primarily involving mature market funds. The underlying reasons can be summarized as three points: first, the U.S. stock market is the only large-scale market capable of accommodating trillion-dollar incremental capital with manageable trading impact costs; second, continuous, comparable, and predictable disclosure and regulatory systems significantly reduce information asymmetry costs for cross-market investments; third, the U.S. offers the most concentrated supply of high-quality assets in long-term sectors such as technology, software, cloud, and AI platforms, with highly mature ETFs and index tools, facilitating low-cost, efficient long-term allocation.

Macroeconomic Environment: Mild Rate Cuts and Policy Battles Coexist, but Long-Term Direction Remains Unchanged

The macro baseline scenario for 2026 is closer to “interest rate decline + economic cooling but still resilient.” The Federal Reserve’s SEP forecasts a median policy rate of about 3.4% at the end of 2026, marginally lower than the current target range, which is favorable for corporate financing and valuation environments. While economic growth will slow from high levels, the CBO projects a normal growth rate around 1.8%, suggesting corporate earnings are more likely to experience a “slowing but not collapsing” trajectory.

A noteworthy variable is tax policy. Many individual and family provisions from the 2017 tax reform are set to expire at the end of 2025, likely leading to a policy-intensive period in 2026. Fiscal pressures could intensify long-term interest rate fluctuations, causing short-term market turbulence. However, it is important to distinguish volatility from trend reversal. As long as the three long-term drivers—institutional advantages, industry cycle, and capital structure—remain fundamentally intact, short-term policy disturbances can provide windows for phased allocation and extended holding periods.

The long-term allocation value of U.S. stocks fundamentally stems from a “systematic—industry—capital” three-in-one positive feedback system. It does not rely on macro luck in any particular year nor on the valuation myth of a single leading stock but is rooted in more stable, replicable structural dividends. For long-term compounding-focused funds, the “core holding” attribute of U.S. stocks has not diminished; rather, amid rising global uncertainties, it has become increasingly scarce.

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Disclaimer: The market carries risks; investments should be cautious. This article does not constitute investment advice. Digital asset trading can involve significant risks and volatility. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. Matrixport is not responsible for any investment decisions based on the information provided herein.