The map of global asset allocation is undergoing a profound reshaping described by Wall Street as a 'healthy normalization'. Peter Oppenheimer, Goldman Sachs' chief global equity strategist, in his latest global strategy report, bluntly stated that the 15-year pattern of US stock dominance has shown signs of loosening, capital is accelerating outward from US large-cap tech stocks, Japan, Asia-Pacific and emerging markets have become the biggest beneficiaries, and cross-regional and cross-industry diversified allocation has regained its dominant position. This report was released at a critical node when the global market is seeking a new balance among AI capital expenditure boom, geopolitical conflicts, and the divergence of monetary policies of various countries. The underlying fundamental logic behind it is worth reading carefully by every investor concerned with global assets.
Fifteen-Year Concentration Pattern Peaking, US Stocks Becoming the 'Weakest' Major Market
Goldman Sachs's strategy report titled 'Momentum, Rotation and Value in Growth' points out that the global stock market is entering a 'healthy normalization' process, and market returns are simultaneously diffusing in both regional and industrial dimensions. Since the beginning of 2025, this 'big diffusion' trend has clearly accelerated: the US stock market has become the weakest performer among major global markets, while Japan, Asia-Pacific and emerging markets have recorded the strongest growth in local currency terms. At the same time, equal-weighted stock indices in the US have significantly outperformed market-cap-weighted indices, highlighting that the monopolistic leading position of a few mega-cap tech stocks is disintegrating.
Looking back at the fifteen years after the financial crisis, tech stocks,凭借 their light-asset business models, the explosion of cloud computing and software demand, and the valuation premium in a zero-interest rate environment, have created continuous leaps in profit margins and return on equity (ROE), becoming the core allocation direction of global capital. However, Oppenheimer's core judgment is: after experiencing extreme concentration in both market value and profitability for more than a decade, the global stock market is facing a structural turning point, the concentration inflection point has been established, and this trend is expected to continue to evolve.
AI Capital Expenditure Super Cycle Eroding Tech Giants' Free Cash Flow Advantage
The fundamental force driving this round of rotation is not valuation bubbles or simple capital hedging, but solid changes in profit fundamentals. Since the launch of ChatGPT triggered the AI wave, super-large technology companies and chip manufacturers have launched an unprecedented capital expenditure race. Huge AI-related investments continue to erode the free cash flow of enterprises, forcing these giants to turn to debt and equity markets for financing, fundamentally changing their financial appearance, and also shaking the core logic that supported the premium valuation of tech stocks.
Measured by free cash flow yield, the advantage of US large-cap tech stocks relative to value markets such as Europe has narrowed significantly, which provides solid fundamental support for the recent relative performance rotation. At the same time, rising government debt, persistent inflation pressure, and increased bond supply have jointly pushed up the cost of capital, making profit growth once again the core driver of stock returns, rather than the previous market dominated by liquidity glut and valuation expansion.
Spillover Effect of Rotation, Traditional Industries Undergoing Value Revaluation
What is worth noting is that the spillover effect of this capital expenditure super cycle is reactivating traditional industries that have been ignored by the market for a long time. The huge investments of super-large technology companies and chip factories, coupled with the expanded fiscal expenditures of various governments for energy security, critical infrastructure, and national defense construction, have jointly created a new round of capital expenditure cycle. Industrial sectors have received significant boosts in both growth expectations and valuation levels, becoming an important receiving direction for capital rotation.
Oppenheimer emphasized that this round of market expansion is based on solid profit growth—not only are corporate profits themselves strong, but profit forecast revisions are also continuously upward, forming a double fundamental verification. This means that the current rotation has sustainability and is not a short-term tactical adjustment. At the national level, the ROE of major markets generally remains high, and the correlation of individual stocks has decreased. As leading sectors continue to rotate, the excess return space of active stock selection is expanding.
Implications for Investors: Value of Diversified Allocation Fully Returns
For global asset allocators, the implication of this report is clear: the cost-effectiveness of a strategy of single-handedly betting on US mega-cap tech stocks is rapidly declining; the value proposition of cross-regional and cross-industry balanced allocation has been re-established. Goldman Sachs believes that the decline in stock correlation and the rapid disintegration of recent momentum strategies are accelerating the handover of market leadership, creating a more favorable environment for investors to carefully select stocks in the growth field.
It is worth noting that Oppenheimer is not completely bearish on the US. He believes that even if the overall P/E ratio is dragged down by the tech sector, the US is still the most attractive market in terms of ROE. In other words, investors do not need to completely withdraw from US stocks, but should shift their perspective from 'over-concentrated on tech giants' to 'broader participation in US stocks', while increasing the allocation ratio to Japan, Asia-Pacific, emerging markets and Europe.
In fact, this 'diversification' wave is not limited to the stock market. Recently, the global bond market has also staged a similar capital migration—US Treasuries have lost their halo due to expanding fiscal deficits and policy uncertainty, and some institutional capital has shifted to European assets such as German Treasuries to seek shelter; the sharp fluctuations of the yen exchange rate have also prompted capital to rethink the global allocation ratio. All kinds of signs show that in an environment with叠加 macro variables, the traditional thinking of 'betting' on a single market or single asset category is being gradually eliminated.
Risks and Outlook: Allocation Discipline Under Increasing Volatility
Of course, the rotation market is not without risks. Global stock markets are repeatedly switching between the rapid accumulation and release of implied volatility, becoming the norm in the new environment of asset allocation; whether the AI industry's capital expenditure can deliver profits remains the biggest variable affecting market sentiment. For ordinary investors, instead of chasing short-term hot spots and rotation, it is better to control the overall position with a volatility budget, absorb market fluctuations through regular rebalancing, and use a dumbbell position structure to balance defense and growth, so as to move steadily in the rotation market.
Goldman Sachs's report provides a clear coordinate for global asset allocation: the 15-year era of 'US stock dominance' is ending, but this is not the end of the market, but the beginning of a new cycle characterized by profit anchoring and diffusion. In such an environment, maintaining an open allocation perspective and strict investment discipline is the key to navigating volatility and achieving stable wealth growth.
