Overheated Markets

Wed 05 Aug 2026

Overheated Markets

Thought Leadership Featured Financial services US

Why Investors Are Rethinking the US and Technology

For much of the past few years, the investment narrative has been dominated by one story: US markets, fuelled by the extraordinary growth of technology and artificial intelligence. Strong returns, record-breaking valuations and relentless investment into AI have cemented the US as the world’s leading investment destination.

But investor sentiment is beginning to change.

Our latest Investor Voice and Advisor Voice research suggests confidence in both the US market and the technology sector is softening. For the first time since we began tracking sentiment in 2024, the US is no longer viewed as the best buying opportunity by UK investors. At the same time, technology has lost its position as the most attractive sector to invest in, while more defensive sectors such as energy and utilities are gaining favour.

While geopolitical uncertainty has undoubtedly influenced sentiment, our findings point to a broader shift. Investors appear increasingly focused on valuation, concentration risk and whether the enormous sums being invested into AI today can ultimately deliver sustainable returns tomorrow.

The question is no longer whether AI has the potential to transform the global economy. It is whether markets have become too optimistic, too quickly.

Our Senior Research Manager, Tom Cox, explores why investor confidence in US markets and technology is beginning to shift, and what growing concerns around AI valuations could mean for future investment sentiment.

The US is home to the world’s largest stock markets (accounting for roughly half the world’s stock market by value). US stock markets have been performing very strongly and been on a historic bull run since the pandemic. Given its size and performance, it came as little surprise to us that UK investors recognised the US as the best buying market opportunity during the first year that we tracked investor sentiment through our Advisor Voice survey (Q1 ‘24 to Q4 ‘24). However, from Q1 ‘25 the tide turned, and the US is no longer rated as the best buying opportunity. The election of Trump, the Independence Day Tariffs and more recently the War in Iran have all undoubtedly taken a toll on how the US, and more specifically, US investments are perceived among UK investors. However, there are also signs that confidence in the US tech sector may also be undermining how US investments are perceived.

In Q1 ‘26, the proportion of UK investors who rate the US as a best buying opportunity fell below 20% for the first time, to a new low point (19%). Almost -10pp below the UK (28%). UK Investors were also asked which Sectors present the best buying opportunities. Although Tech had led since our survey began in 2024, its rating fell below 30% for the first time to a new low (28%). At the same time there were significant improvements in how investors rate the Energy (25%) and Utilities (16%) sectors.

Advisors echo this sentiment. Asked how they would rate current investment opportunities in the US, most only rated it ‘OK’ (62%), only a quarter (25%) rated them ‘good,’ while 14% even said investment opportunities in the US were ‘bad.’

US, Tech & AI increasingly seen as overheated

There have been suggestions in the media[1] that stocks markets around the world have become over-valued. Particularly in the US stock market, where about a third[2] is made up of a small number of cutting-edge tech giants. The ‘Magnificent 7’ tech and AI companies (including Tesla, Meta, Amazon, Microsoft, Alphabet (Google), Apple and Nividia) have a huge impact in fuelling the US stock market, recently spending hundreds of billions on building AI infrastructure and data centres in the US. This expansion and expenditure is only predicted to increase. The question is; will these companies ever see a return on their outlay investments?

The Boom in US Data Centres in numbers:

The US hosts over 5,000 AI data centres, which account for roughly 45% of all facilities worldwide
Growth in generative AI models is driving significant change in data centre design and operations, as operators struggle to keep pace with AI’s energy demands
The US is projected to spend a further $2-$2.8tn on data centre infrastructure by 2030.[3]

The Potential for an AI Bubble

Although still in its infancy, AI is already having a positive impact on the US economy and GDP (JP Morgan estimates that AI contributed 1.1% to 1.5% to the US economy in 2025[4]).

AI’s potential has been hugely hyped up among experts in the field (admittedly with a vested interest):

Andrew Ng (Cofounder and head of Google Brain): “It is difficult to think of a major industry that AI will not transform.[5]”
Goldman Sachs economists: “AI could increase global GDP by about 7% (≈$7 trillion) over a decade.[6]”

Despite the potential, despite the hype, there are very real industry concerns that we have seen this before with other technological advancements, most recently the dot-com bubble of the late 90s. Many experts are predicting an AI bubble which could burst any time. Concerns centre around:

Hype and over-valuations leading to a bubble[7]. The risk of overbuilding infrastructure beyond what ends up being needed or is financially supported[8]
Market concentration[9] leading to competition and regulation issues, inequality and power vacuums[10] and circular investment between a small number of companies making demand look stronger than it actually is[11]
Unclear path to monetisation, it is currently unclear how many companies will consistently make money from AI[12] and whether they will ever re-coup outlay spend in returns[13]

Opinium’s data reveals that many UK investors share these concerns:

Close to a third felt that US investments (33%), AI investments (37%) and Tech investments (32%) are over-valued
By comparison, far fewer felt that UK investments (21%), Energy investments (27%) and Commodity Investments (20%) are over-valued

Advisors echo this sentiment. Asked if they think investment opportunities in the US are better worse now than five years ago

Half (51%) rated them worse
A third (32%) rated them the same
while just 16% rated them better

Though our Advisor Voice and Investor Voice studies we’ll continue to track which markets, sectors and assets classes are seen as offering the best investment opportunities, through these turbulent times. So we can better observe, understand and predict investor attitudes and behaviour.