Europe is losing the AI race. The continent’s largest companies are increasingly outpaced by their US counterparts—particularly in the rapidly evolving technological sector.
While the broader European equity market has outperformed the S&P 500 so far this year, the continent’s corporate heavyweights are falling behind in the global stock market hierarchy. The gap highlights a deeper transatlantic divide in innovation, private capital, and long-term competitiveness.
As of mid-July, the combined market capitalisation of Europe’s seven largest listed firms — SAP, Novo Nordisk, Hermès, ASML, LVMH, Roche and Nestlé — stands at $2.2 trillion (€1.73tr), virtually flat year-to-date.
That puts the combined market cap of US 7 largest companies at $18,8 trillion vs. of EU’s largest.
By contrast, the US ‘Magnificent Seven’ — Nvidia, Microsoft, Apple, Amazon, Alphabet, Meta and Broadcom (instead of Tesla) — have reached a cumulative valuation of $18.8tr (€16.12tr), up 10.2% since the start of the year.
Tech dominance defines the US-EU divergence
The divergence reflects the central role of technology and artificial intelligence in today’s equity market leadership.
Seven out of seven of the largest US companies are technology firms with significant exposure to AI infrastructure, cloud computing or data platforms.
In Europe, just two companies in the top seven — SAP and ASML — are active in the technology sector, with the remainder concentrated in luxury goods, pharmaceuticals and consumer staples.
Nvidia alone is valued at €3.59 trillion, larger than the combined market cap of Europe’s top seven. Its dominance is tied to its role in powering AI infrastructure worldwide, from model training to real-time inference.
“While the others use AI to power their platforms and services, Nvidia supplies the very foundation on which those ambitions are built,” said Natalie Hwang, founder of Apeira Capital, in an emailed comment.
“It quietly enables the success of every other member of the Magnificent Seven, while remaining their most indispensable partner.”
According to industry estimates, Meta, Amazon, Alphabet and Microsoft are set to spend over $320 billion (€294 billion) on AI infrastructure in 2025, much of it focused on inference optimisation and hyperscale data centres.
JP Morgan Chase’s message to Europe: ‘You’re losing’
JP Morgan Chase chief executive Jamie Dimon reinforced the broader concerns over Europe’s global position during remarks at a recent event in Dublin hosted by the Irish foreign ministry.
“Europe has gone from 90% of US GDP to 65% over 10 or 15 years. That’s not good,” Dimon said. “You’re losing.”
He pointed to overregulation, fragmentation, and weak productivity as structural weaknesses, and urged European leaders to act on the 2024 report led by former ECB President Mario Draghi, which recommended €800 billion in annual investment to strengthen industrial competitiveness.
Dimon added: “We’ve got this huge, strong market and our companies are big and successful, have huge kinds of scale that are global. You have that, but less and less.”
A moment of reckoning
The diverging fortunes of the Magnificent Seven and Europe’s corporate champions symbolise a broader transatlantic imbalance—not just in technology, but in economic dynamism.
While Europe’s top firms are respected global brands, they are increasingly eclipsed by American companies that are not only growing faster but also shaping the future. The AI race has become a litmus test for global economic relevance.
If Europe is to keep pace, it must resolve its innovation shortfall, energise private investment, and modernise regulation.
Otherwise, as Dimon put it bluntly: “You’re losing.”
