'Time to look beyond America': Ruchir Sharma says global markets now outperforming US

American exceptionalism in financial markets is losing its edge, says investor and author Ruchir Sharma, pointing to a year where international stock markets are finally outperforming the U.S. Despite resilience in U.S. equities, Sharma warns it’s largely a “mirage” driven by an AI bubble.

Speaking on a podcast hosted by Nikhil Kamath, Sharma highlighted a rare reversal in global market performance. “After a long time, international stock markets are outperforming America,” he said. While U.S. indices are up about 8–9% in 2025, Sharma noted, global markets are ahead by nearly 20% in dollar terms.

Sharma has long criticized what he calls “American exceptionalism” in investing — the belief that U.S. markets will always outshine the rest. “Last year, it seemed the only country people were willing to invest in was America,” he said. “Europe, emerging markets, Japan — people thought it was all junk.”

That narrative, Sharma argues, is finally being challenged. “The U.S. dollar has fallen, and international markets are doing better. So in that way, American exceptionalism has been dented.”

However, Sharma acknowledged a surprising twist: the durability of U.S. markets, even amid trade wars and tariff pressure. “What’s surprised me is how well the American markets have held up despite all the tariffs and everything else,” he said.

Still, he warned the current U.S. rally may be misleading. “The average stock in America is barely up. Whatever returns you’re seeing — 8, 9, 10% — are all because of the AI-dominated companies at the top,” he explained. The real test, Sharma added, will come when the “AI bubble fades.”

In essence, Sharma suggests that U.S. markets are skating on thin ice. “If it weren’t for the AI mania, the American stock market would be down,” he told Kamath.

With global equities outpacing Wall Street and the dollar under pressure, Sharma sees a world slowly waking up to more diverse investment opportunities — one less centered on America.