US Stocks Too Expensive? This Top CIO Scoured the Globe and Found 5 Stocks More Attractive Than NVIDIA

marsbitPublicado em 2026-06-09Última atualização em 2026-06-09

Resumo

Summary: Main Street Research CIO James Demmert maintains his bullish 8,100 target for the S&P 500 but argues that greater opportunities now lie overseas. He identifies five international stocks with superior valuations poised to benefit from the AI revolution, suggesting international markets will outperform the US for years. Key Recommendations: 1. **ASML (Netherlands):** A foundational chip manufacturing technology provider, offering crucial AI exposure and geographic diversification. Demmert's top long-term pick. 2. **HSBC (UK/Asia):** A global bank with a 9x P/E ratio, better growth prospects than US peers like JPMorgan, and strong Asian presence. 3. **Siemens Energy (Germany):** A direct play on global power grid expansion driven by AI, crypto, and EV electricity demand. 4. **BHP Group (Australia):** A "hidden AI play" and "second derivative" of the trend due to massive copper demand for data centers. Trades at a 16x P/E. 5. **AstraZeneca (UK):** An undervalued healthcare stock with a strong pipeline (18x P/E, >20% growth), expected to benefit from AI's impact on medicine. Core Thesis: International outperformance is driven by both attractive valuations and a major policy shift. While the US tightens fiscal policy, Europe and Japan are launching unprecedented stimulus, reigniting growth. Demmert recommends allocating 45% of a portfolio internationally, citing excessive US investor conservatism as a key mistake.

Compiled & Translated: Deep Chao TechFlow

Guest: James E. Demmert, Main Street Research CIO

Host: Caroline

Podcast Source: TheStreet & James E. Demmert

Original Title: 5 Foreign Stocks That Could Beat The S&P 500

Broadcast Date: June 2, 2026

Key Points Summary

Main Street Research CIO James Demmert, while maintaining a year-end target of 8100 for the S&P 500, bluntly states that returns from overseas equity markets will surpass those of the US stock market. He presents five international stocks with valuations far lower than their US peers yet directly benefiting from the AI revolution: HSBC with a P/E of 9, BHP with a P/E of 16, and ASML, which he considers the pick "if you could only hold one stock for five years."

Demmert judges that Europe and Japan are taking up the baton of global growth with unprecedented fiscal stimulus, and this trend of international equities outperforming the US "will last for several years," suggesting investors allocate 45% of their portfolio overseas.

Highlights

  • "If investors are only holding US stocks now, what they're missing out on is first diversification, and second, amazing opportunities outside the US where stock prices are more reasonably priced with growth rates that are equally attractive, if not higher."
  • "Overseas markets have already outperformed the US, and we believe this trend will continue."

The Ultimate Global Chip Play: $ASML

  • "We hold NVIDIA and Micron, and ASML plays a different role in the AI trade—it provides the chip design and manufacturing technology, while also giving us diversification exposure outside the US."
  • "The US dollar is persistently weakening, and allocating assets to stocks of overseas companies helps diversify away from the concentration risk of a US dollar-denominated portfolio."

High-Value Global Bank: $HSBC

  • "HSBC has a P/E ratio of only 9, cheaper than JPMorgan Chase, with a better forward growth outlook. As a global investment bank, its influence in Asia is unmatched by JPMorgan."
  • "I don't think Chinese equities are investable at this point in time, but companies operating or capable of operating there, I think, are very meaningful."

Energy Infrastructure Play: Siemens Energy

  • "The world is running out of electricity—AI is consuming power, cryptocurrency is consuming power, electric vehicles are consuming power. The core business of Siemens Energy is helping the world build its power grids."
  • "The AI revolution is still in the third or fourth inning of a nine-inning game, still in the early stages. The behavior of this type of stock—if you remember the tech boom of the '90s—the trading patterns in the first few years are very similar, and this trend can last for quite some time."

The Hidden AI Mining Stock: $BHP

  • "Most people think this is just a commodity trade, but when you consider all the data center needs, this is absolutely an AI investment—I call it the second derivative of AI."
  • "The world needs more copper. The more data centers we build, the more important a role copper plays. BHP's P/E ratio is only 16; valuations overseas are far superior to the US."

Undervalued Healthcare Rebound: $AZN (AstraZeneca)

  • "Healthcare has been neglected by the market for too long. AstraZeneca has a robust pipeline of drugs and biomedical products, with a P/E of 18 and growing over 20% annually."
  • "Investors will start rotating into healthcare sometime in the second half of this year, as they will then begin to feel the value-add and real contributions AI is starting to make in the healthcare sector."

Why International Equities Are Outperforming the US

  • "It's a valuation story, but it's also a story about changing global policies. The US is tightening fiscal spending, while Europe is taking a page out of our old playbook—they are engaging in unprecedented massive government fiscal spending, trying to keep interest rates low."
  • "Overseas markets have outperformed the US for the first time in years, and we think this is a trend that will last for several years."

Rapid-Fire Q&A: Top Pick & Biggest Risk

  • "If you could only hold one stock for the next five years, it would be ASML. The first to double would be ASML. The first to buy on a pullback would be Siemens Energy."
  • "The most undervalued international market is Europe. The biggest mistake US investors make is not allocating enough overseas, being too conservative. We recommend 45% overseas, the rest domestic."

Introduction

Host Caroline: The S&P 500 at 8100—that's the bold prediction from my next guest. Although he remains bullish on US stocks, he says some of the biggest opportunities right now might actually be overseas. Joining me now is James Demmert, Founder and Chief Investment Officer at Main Street Research. James, great to have you.

James:

Great to see you, Caroline.

Host Caroline: You still think the S&P can hit 8100 this year, yet none of your top five stock picks are in the S&P 500. What does that say?

James:

It says that we think the S&P can go to 8100—that target used to look very high, and it still doesn't seem as far-fetched as before, but it is certainly closer than imagined. It also says that if we're leaning overseas, it's because we think they can actually outperform the S&P 500.

Host Caroline:What are investors missing out on if they only hold US stocks right now?

James:

I think they're missing out on first diversification, and second they're missing out on amazing opportunities outside the US where stock prices are more reasonably priced with growth rates that are equally attractive, if not higher. You may have noticed that overseas markets have already outperformed the US year-to-date, and we believe this trend will continue.

Pick #1: The Ultimate Global Chip Play

Host Caroline: Alright, let's get into your top five stock picks, starting with ASML. This stock is up a lot already this year, why are you still buying it?

James:

I know in the tech world, everyone is all over Micron and the memory chip trade. But don't forget, ASML is a company that does chip design, manufacturing, and technology; they are an integral part of the entire chip manufacturing process. The company is headquartered in the Netherlands, currently trading at 38 times earnings, but their annual growth rate far exceeds that. It's a great entry point into overseas equities.

Host Caroline: You mentioned Micron, so why hold ASML instead of just buying Micron or even NVIDIA or other chip stocks?

James:

We do hold NVIDIA, and we hold Micron. ASML is in our portfolio because it plays a completely different role in the AI trade—it's about the chip design technology, while also giving us diversification exposure outside the US. You also know that the US dollar is persistently weakening, and allocating assets to stocks of overseas companies helps diversify away from the concentration risk of a US dollar-denominated portfolio.

Pick #2: High-Value Global Bank

Host Caroline: Next is HSBC Holdings. There are plenty of great bank stocks to buy in the US, why go overseas for a bank?

James:

That's a very good question. The core reason is valuation. Caroline, HSBC has a P/E ratio of only 9. In comparison, JPMorgan Chase, while an excellent company—and we hold it—HSBC offers better valuation and a better forward growth outlook, because what you're seeing is a reawakening of overseas investing. That's why overseas indices are outperforming their domestic counterparts. HSBC is a significant component of overseas indices, and as a global investment bank, its business reach covers not just the US and Europe but also has a presence in Asia that JPMorgan simply cannot match.

Host Caroline: Still, how should investors view the China risk?

James:

I'm not sure the Chinese market itself is investable, but I do think you can invest in companies that can operate safely in China. I know that's also why NVIDIA is eager to open its doors to the Chinese market and sell products there. So, I don't think Chinese equities are investable at this point in time, but companies operating or capable of operating there, I think, are very meaningful.

Pick #3: Energy Infrastructure Play

Host Caroline: Next on your list is Siemens Energy, trading in the US under SMERY. Up about 40% year-to-date, why are you bullish on this stock?

James:

It has indeed performed well this year, and I think that performance will continue. We need to be clear about one thing—the world is running out of electricity. AI is consuming massive amounts of power, cryptocurrency is consuming power, electric vehicles are consuming power. And as we all think about increasing the power supply, that is precisely the domain Siemens Energy focuses on. They are helping us build global power grids, not just in Germany where they are headquartered, but all over the world. This stock trades around 37 times earnings, but earnings growth far outpaces that.

Host Caroline: I mentioned it's up year-to-date, but the one-year chart is even more impressive—over 90%. How should investors approach stocks that have already run up so much? Is it too late if they haven't entered yet?

James:

If they haven't entered, my consistent advice is to wait for a pullback, buy on weakness, or start with a third of a position and build it gradually. If you already hold it, remember this type of stock can be volatile; the entire AI trade is volatile. But in our view, the AI revolution is still in the third or fourth inning of a nine-inning game, still in the early stages. The behavior of this type of stock—if you remember the tech boom of the '90s—the trading patterns in the first few years are very similar, and this trend can last for quite some time.

Pick #4: The Hidden AI Mining Stock

Host Caroline: Next is BHP Group, also up over 40% year-to-date. Why are you still bullish on the mining sector?

James:

The world needs more copper. The more data centers we build, the more important a role copper plays. We also believe we are in a global economic expansion, which means demand for raw materials will only increase, and BHP is an excellent way to participate in this trend. The company is headquartered in Australia, with a P/E ratio of only 16. Again, valuations overseas are far superior to the US.

Host Caroline: So is this a commodity trade or an AI infrastructure trade?

James:

That's exactly what it is. Most people think this is just a commodity trade, but when you consider all these data center needs, this is absolutely an AI investment—I call it the second derivative of AI.

Pick #5: Undervalued Healthcare Rebound

Host Caroline: Finally, a healthcare stock, AstraZeneca, which has actually underperformed the market this year, roughly flat. Why buy a lagging healthcare stock?

James:

This is the "little engine that could." We really feel the healthcare sector has been neglected by the market for too long. AstraZeneca has a very robust pipeline of drugs and biomedical products. A P/E of 18, growing over 20% annually. We believe the market will re-recognize the value of these stocks.

We also believe investors will start rotating into healthcare sometime in the second half of this year, as they will then begin to feel the value-add and real contributions AI is starting to make in the healthcare sector. So, I think this ultimately becomes an AI investment as well. And in terms of valuation and overseas exposure, it's a great way to diversify a portfolio.

Why International Equities Are Outperforming the US

Host Caroline: So, looking at this overall from a valuation perspective and across these five picks, is the logic for international over US purely a valuation story right now?

James:

It's a valuation story, but it's also a story about changing global policies. You also know the US is tightening fiscal spending, or trying to. What we've done, effectively, is passed the growth baton to Europe—now it's Europe's turn to follow our old script. In Europe, overseas, in Japan, you're seeing these economies really heat up because they are engaging in unprecedented massive government fiscal spending while trying to keep interest rates low. That's why overseas markets have outperformed the US for the first time in years, and we think this is a trend that will last for several years.

Rapid-Fire Q&A: Top Pick & Biggest Risk

Host Caroline: Let's move to a rapid-fire Q&A. If you could only hold one stock for the next five years, which one would you choose?

James: ASML.

Host Caroline: If you had to drop one from this list, which one would you drop?

James:

AstraZeneca.

Host Caroline: Which one are you buying first on a pullback?

James:

Siemens Energy.

Host Caroline: Which one of these five will double first?

James:

ASML.

Host Caroline: If the economy slows down, which one is most resilient?

James:

AstraZeneca.

Host Caroline: Which one has the biggest competitive advantage versus its peers?

James:

Siemens Energy.

Host Caroline: What's the biggest risk common to all five stocks?

James:

A bear market.

Host Caroline: If you were to add a sixth stock to the list, what would it be?

James:

NVIDIA.

Host Caroline: Which is the most undervalued international market right now?

James:

Europe.

Host Caroline: What's the biggest mistake US investors make when allocating overseas?

James:

Not allocating enough overseas, being too conservative.

Host Caroline: For a standard portfolio, what should be the US vs. international allocation?

James:

We recommend 45% overseas, the rest domestic.

Host Caroline: A US stock to hold for five years, not NVIDIA, which one?

James:

Costco.

Host Caroline: What type of US stock are you avoiding right now?

James:

Anything in real estate and consumer discretionary.

Host Caroline: Is that because of interest rates?

James:

It's interest rates, and it's also the K-shaped economy.

Host Caroline: Okay, one word to describe your feeling about the current US market.

James:

Bullish, but always worried.

Host Caroline: One word to describe your feeling about the international market.

James:

Very optimistic—that's two words.

Perguntas relacionadas

QAccording to James Demmert, what is the primary reason investors should consider increasing their allocation to international stocks?

AJames Demmert believes investors should increase international allocations primarily for diversification and to access better opportunities with more reasonable valuations and attractive, potentially higher growth rates compared to the US market. He points out that international markets have already started outperforming the US, a trend he expects to continue for several years.

QWhat is the specific role of ASML in the AI supply chain, and why does Demmert recommend it despite holding US chip stocks like Nvidia?

AASML plays a unique role in the AI supply chain by providing the critical chip design and manufacturing technology (lithography systems). Demmert recommends it alongside US chip stocks like Nvidia because it offers a different exposure within the AI theme and provides geographical diversification outside the US, which also helps hedge against the risk of a weakening US dollar.

QWhy does Demmert favor HSBC over a US bank like JPMorgan Chase?

ADemmert favors HSBC due to its superior valuation and better forward growth prospects. HSBC trades at a P/E of only 9x compared to JPMorgan, and as a global investment bank, it has a significant presence in Asia that JPMorgan cannot match. While he is cautious on direct investments in Chinese stocks, he views companies operating in or with access to China, like HSBC, as meaningful opportunities.

QHow does Demmert connect BHP Group and Siemens Energy to the AI investment theme?

ADemmert connects them as essential infrastructure plays for the AI revolution. BHP is a "hidden AI stock" because copper is critical for building data centers (an AI second-derivative play). Siemens Energy is crucial because the world is facing an electricity shortage driven by AI, crypto, and EVs, and the company builds the power grids needed to support this increased demand.

QWhat portfolio allocation does Demmert suggest for US versus international stocks, and what does he cite as the biggest mistake US investors make regarding international exposure?

ADemmert suggests allocating 45% of a portfolio to international stocks and the remainder to domestic (US) stocks. He states that the biggest mistake US investors make is being too conservative and under-allocated to international markets, thereby missing out on diversification and the compelling opportunities abroad.

Leituras Relacionadas

Humanity Loses $31 Million, a Private Key Causes Token Price to Plunge 90%

On June 9th, the digital identity project Humanity Protocol suffered a major security breach resulting in over $31 million stolen from hundreds of wallets holding its H token. The attack was caused by the compromise of a private key belonging to a foundation member, leading the team to advise users against interacting with its bridge or liquidity pools. Following the incident, the price of the H token plummeted by over 90%, from around $0.70 to a low of $0.052, wiping out a significant portion of its market capitalization. The attacker allegedly minted 100 million new H tokens and began selling them for BNB. Humanity Protocol, founded in 2024, aimed to verify human users through palm-print biometrics and zero-knowledge proofs on Polygon CDK. Despite raising $50 million across two funding rounds and achieving a unicorn valuation, the project faced prior controversies. Shortly after its June 2025 token launch, reports emerged that only about 1 million of its 9 million registered IDs had completed biometric verification, suggesting 88% might be bots. Furthermore, allegations surfaced that the project might be a rebranded "shell" of a Chinese access control company, raising concerns about data privacy and authenticity. The project's founder, Terence Kwok, has a controversial business history. His previous venture, Tink Labs, burned through $170 million in funding before collapsing in 2020. The breach highlights the persistent critical risk of private key management in crypto. With no user compensation plan detailed in the initial response, the incident deals a severe blow to trust in a project already struggling with credibility issues.

Foresight NewsHá 10m

Humanity Loses $31 Million, a Private Key Causes Token Price to Plunge 90%

Foresight NewsHá 10m

How to Conduct Deep Research Using Claude's Dynamic Workflows

The article "How to Use Claude's Dynamic Workflows for Deep Research" discusses overcoming the pitfalls of technical research, where both humans and AI can get overwhelmed by information, leading to vague conclusions. It introduces Claude Code's new "Dynamic Workflows" feature, which automatically designs and executes task-specific workflows before starting a task, unlike simpler "planning modes." This approach incorporates validation, result convergence, and adversarial verification from the outset. The core of Dynamic Workflows is six predefined scheduling patterns that address how to decompose tasks and synthesize results: 1. **Classify-and-Act (Routing):** An agent classifies the task and routes it to the most suitable specialist agent for execution. It's precise and efficient but struggles with ambiguous tasks. 2. **Fan-out & Merge:** The task is split into parallel, independent subtasks whose results are later merged. It's fast and isolates contexts but is more expensive and challenging to synthesize. 3. **Adversarial Verification:** Multiple "challenger" agents critique a worker agent's conclusion, requiring majority approval. This counters confirmation bias and self-assessment errors but relies on verifiable facts. 4. **Generate & Filter:** Multiple agents generate many candidate solutions, which are then filtered against a rubric to output only the best. It fosters diversity but depends heavily on the filter's quality. 5. **Tournament:** Multiple agents compete on the same task, with pairwise comparisons eliminating contestants over rounds to select the best. This offers stable relative judgment but is complex. 6. **Loop:** An agent iteratively attempts a task, learning from errors and adjusting until a stop condition is met. It handles tasks with unknown scope but risks infinite loops without proper design. The author compares their own custom deep-research system, which involved multi-agent analysis and deduplication but lacked goal-oriented convergence, to Claude's built-in workflow. The official workflow adds critical layers: initial problem decomposition, credibility assessment of sources, cross-agent voting to delete weak conclusions (not just averaging), and output tightly focused on the user's original goals and actionable recommendations. This structurally addresses common AI issues like goal drift, premature stopping, context pollution, and output bias. In summary, Dynamic Workflows represent a shift from smarter single conversations to a structured research process, compressing what used to require many dialogues into 3-4 interactions, albeit at higher token cost. The author notes remaining challenges for their specific domain (blockchain research): the need for fact-based verification over official documentation, depth in truly novel interdisciplinary thinking, the practical validation of proposed solutions, and tailoring information density to the audience.

marsbitHá 20m

How to Conduct Deep Research Using Claude's Dynamic Workflows

marsbitHá 20m

When LPs Teach Me Investment with Doubao: A Self-Narrative of a Private Equity GP Switching Careers

When LPs Use Doubao to Teach Investing: A Transition Story of a Private Equity GP AI is making life increasingly difficult for small private equity fund managers, as a former GP of an offshore dollar fund reveals. The fund, managing tens of millions in US stocks, outperformed the Nasdaq but struggled with fundraising. Its traditional Cayman SPC/BVI structure failed to attract major Asian LPs, who now prefer Hong Kong LPF or Singapore VCC frameworks. The rise of AI-powered quantitative strategies has further squeezed the space for funds like his, which relied on subjective, discretionary investing. AI tools have leveled the information playing field, empowering LPs—often high-net-worth individuals, entrepreneurs, or family offices—to analyze investments themselves using chatbots like Doubao. This has eroded trust in GPs' expertise, leading to more frequent challenges over investment decisions and even withdrawals, especially during market rallies when retail investors sometimes outperform funds. Friction arises not necessarily from AI's capabilities but from how LPs use it. Many rely on conversational AI for validation rather than rigorous analysis, sometimes receiving misleading or hallucinated advice. While AI democratizes research, effective investing still requires discerning real insight from plausible-sounding output. Ultimately, AI is unlikely to fully replace GPs. Asset management remains a trust-based service. However, the industry must adapt. The future may see "human私募" (private equity) learning from AI and focusing more on providing value beyond pure analysis—perhaps by mastering the emotional intelligence and trust-building that machines cannot replicate.

Odaily星球日报Há 48m

When LPs Teach Me Investment with Doubao: A Self-Narrative of a Private Equity GP Switching Careers

Odaily星球日报Há 48m

AI Leads to Layoffs? Research Shows AI Is More Expensive Than the People It Replaces

Title: AI Layoffs? Research Shows AI is More Expensive Than the Workers It Replaces. This year, nearly 50,000 employees have been laid off due to AI, with companies initially believing AI could replace human jobs. However, recent findings indicate that the actual operational costs of AI often exceed the expense of the human labor it was meant to replace. Examples include Uber exhausting its annual AI budget in just four months, Microsoft cutting Claude Code licenses due to high costs, and an Anthropic employee incurring $150,000 in API usage in a single month. A CloudZero survey reveals that 45% of enterprises spend over $100,000 monthly on AI, yet only 8% of S&P 500 companies report any AI-related revenue, and half struggle to measure ROI. Analyst Scott Galloway predicts a shift toward cheaper Chinese AI models, which are 10 to 30 times more affordable than American counterparts. Data shows Chinese models' usage among developers surged from 1% in 2024 to over 60% by mid-2026, with 80% of U.S. AI startups adopting them. This trend may prompt regulatory responses, such as potential restrictions from the Trump administration.

marsbitHá 1h

AI Leads to Layoffs? Research Shows AI Is More Expensive Than the People It Replaces

marsbitHá 1h

Wang Chuan: After Investing in Storage Stocks and Seeing a Thirty-Fold Return, How to Remain Unanxious (Part 7) - A Quarter-Century Cycle

Wang Chuan: Reflections on Investment Anxiety and Market Cycles After Observing a 30x Gain in a Storage Stock (Part 7) – A Quarter-Century Cycle This article examines the cyclical nature and inherent risks in technology hardware investments, using the storage and semiconductor sectors as examples. It criticizes the misleading practice of "annualized" Net Dollar Retention (NDR) rates, where short-term growth is extrapolated unrealistically. A key concept explored is "reflexivity" – demand driven by panic, exploration, and liquidity during market booms, which can vanish just as quickly when conditions reverse. This reflexivity exists both in product demand and among speculative stock buyers, creating powerful feedback loops that inflate prices during upturns and exacerbate crashes during downturns. The author highlights a major risk for hardware sectors: unlike assets with defined cycles (e.g., Bitcoin's halving), there's no guarantee of a swift recovery post-crash. Companies like Micron, Intel, and Cisco took roughly a quarter-century to surpass their 2000 highs, enduring drawdowns exceeding 80%. This is attributed to the "bullwhip effect" in supply chains, where demand collapses instantly but过剩产能 persists, and a migration of narrative-driven capital. High-valuation stories吸引 speculative funds during growth phases, but these funds quickly depart for the next hot narrative once growth slows, leaving behind stronger companies with much lower valuations. The piece warns of dangerous mental models formed during bull markets: 1) equating current strong demand with perpetual high growth, and 2) believing that making fast, large profits is easy. Citing巴菲特, the author notes that easy money undermines rationality, likening speculators to Cinderella at a ball with a clock that has no hands. The current phase presents an asymmetric risk-reward scenario: potential for further gains exists, but the downside risk is an 80%+ drawdown and a multi-decade wait for breakeven, which reflexive speculators cannot tolerate. The hypothetical investor "老王" (Lao Wang), who achieved a 30x return, is used to illustrate potential pitfalls. Leverage could lead to a wipeout during a sharp correction. Even without leverage, ingrained beliefs in easy money would likely lead him to double down after losses, expecting a quick rebound. Instead, he might face a protracted decline, depleting his resources through frantic trading as the high-growth narrative fades. The conclusion references Schopenhauer, comparing those who have seen multiple market cycles to an audience seeing the same magic trick repeatedly—once the illusion is understood, its power is gone.

marsbitHá 1h

Wang Chuan: After Investing in Storage Stocks and Seeing a Thirty-Fold Return, How to Remain Unanxious (Part 7) - A Quarter-Century Cycle

marsbitHá 1h

Trading

Spot
Futuros
活动图片

Categorias popularesright-arrow

Etiquetas Popularesright-arrow