Fidelity Sees Momentum in Non‑US Stocks Fueled by AI, Supply‑Chain Shifts, and Infrastructure Spending

Why non‑US stocks have been catching up

After years of US mega‑cap dominance, overseas markets grabbed the baton last year, finishing roughly 14 percentage points ahead of US equities. Fidelity links that jump to a mix of American tariff actions, a weaker dollar, and notable interest‑rate cuts in several countries and regions. The trend has not fizzled in 2026: non‑US markets have continued to climb, while their valuations generally sit below US levels.

That setup could have legs. With corporate budgets pointing to hefty outlays, Fidelity managers think the associated capital flows are likely to persist over the next several months. Crucially, AI spending is not confined to Silicon Valley. The buildout is lifting business activity worldwide.

Where the money is heading

One big engine: AI investment rippling into adjacent fields like computer hardware, power delivery gear, and basic materials. Building AI capacity requires more data centers, which boosts demand for chips and memory, plus grid equipment and metals that move electricity, including copper.

Asian and European companies sit deep in this supply chain. In Japan, firms are central to making specialized semiconductor tools, advanced robotics, and critical materials. Resonac Holdings (SHWDF) is highlighted as a leader in materials for chip fabrication and packaging.

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Toyo Gosei (TYGIF) is seen as well placed for next‑gen chipmaking, including extreme ultraviolet lithography used to etch tiny circuits on wafers. Renesas Electronics (RNECY) supplies semiconductors used across a wide range of electronic and industrial end markets.

"Corporate spending on building AI capabilities remains robust because many companies don't want to be left behind by competitors," says Bill Bower, manager of the Fidelity® Diversified International Fund (FDIVX). "There's a fear factor in the corporate world along the lines of: 'I have to do this, or else I may be out of business.'" Bower counts Schneider Electric (SBGSY) and Siemens Energy (SMERY) among top holdings and has also invested in Antofagasta (ANFGF), the Chilean copper group. "It is my belief that the supply chain and the build‑out of artificial intelligence capabilities should remain strong for the next couple of years," he adds.

Materials are part of the story too. Ivan Xie, co‑manager of the Fidelity® China Region Fund (FHKCX), points to Zijin Mining as an example that could benefit if copper stays tight while data center and grid buildouts accelerate. "I'm on the lookout for stocks in other areas that I believe are inexpensive and could benefit from some kind of growth catalyst," Xie says.

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