In late July 2026, the second earnings season for US tech giants reached its peak. Companies like Apple, Microsoft, Google, and Amazon successively released better-than-expected results, driving the three major indices to new highs. Against the backdrop of persistent weakness in the Hang Seng Index and volatile divergence in A-shares, more and more Asian investors are turning their attention across the Pacific -- the US stock market. Why buy US stocks? This question has become a hot topic in investment circles.
Strong Performance of Tech Giants with Earnings Growth as the Biggest Driver
As of July 28, among US tech companies that have released earnings, the S&P 500 information technology sector's overall profit growth reached 18.5% year-on-year, significantly higher than other industries. Apple, driven by strong sales of iPhone 17 series and Vision Pro second generation, achieved a 12% revenue increase year-on-year, with Greater China revenue rebounding against the trend. Microsoft's Azure cloud business growth returned to 30%, with AI-related revenue share rising to 25%. Google's parent company Alphabet's advertising revenue exceeded expectations by $1 billion, and YouTube paid subscribers surpassed 100 million.
These data confirm a core logic: the wave of global technological innovation and digital transformation is still led by US companies. For Asian investors, buying US tech stocks is essentially investing in the world's most efficient innovation ecosystem. As renowned investment firm BlackRock noted in a recent report: "Over the next five years, value creation in AI, cloud computing, and biotech will be highly concentrated in the US, and US stocks offer the most direct participation channel."
USD Asset Allocation: Hedging Exchange Rate Volatility and Diversifying Risk
In the first half of 2026, the US dollar index remained strong against the backdrop of the Fed maintaining high interest rates, with many Asian currencies depreciating 3%-8% against the dollar. For investors in Southeast Asia and Hong Kong, holding dollar assets can naturally hedge against local currency depreciation risk. Taking the Malaysian ringgit as an example, it depreciated over 6% against the dollar in the past twelve months, while the S&P 500 index returned 15% (in USD) over the same period, translating to a total return of nearly 22% when converted back to ringgit.
"Why buy US stocks? The simplest reason is that when your local currency's purchasing power declines, you need a stronger currency anchor," said Lin Nan, chief strategist for Asia Pacific at private bank Julius Baer, to reporters. "US stocks not only offer the potential for dollar appreciation, but their depth and liquidity far exceed emerging markets, making them suitable for long-term capital allocation."
Value Pockets in Market Divergence
Compared to A-shares and Hong Kong stocks, US stocks are currently not cheap. The S&P 500's P/E ratio is about 22 times, higher than the 10-year average of 18 times. However, structural opportunities still exist. For example, traditional energy and healthcare sectors have reasonable valuations and benefit from US domestic policy support. Meanwhile, mid- and small-cap tech stocks (e.g., chip design, cybersecurity) have a median P/E ratio of only 15 times, significantly lower than large-cap tech companies, yet with better growth prospects.
Hong Kong-based independent research firm Windmill noted: "Many investors mistakenly think US stocks are just the 'Magnificent Seven', but in fact Nasdaq has over 3,000 stocks with extremely broad industry coverage. Through active stock picking or sector ETFs, it is entirely possible to find growth targets with reasonable valuations." This view explains why buying US stocks is not just a rally for large caps, but an inevitable choice for global diversification.
Risks and Barriers: The Other Side of US Stock Investment
Despite clear advantages, investing in US stocks is not without costs. First, trading hours have limited overlap with Asia, requiring investors to adapt to night monitoring or rely on limit orders. Second, exchange rate fluctuations can erode returns; if the dollar suddenly weakens, overseas profits will shrink. Third, the US stock market has low retail participation, with institutional investors dominating, leading to greater information asymmetry risks.
Additionally, valuation bubbles are an unavoidable concern. Morgan Stanley recently warned that AI-related tech stocks are overheated in the short term, with some companies' stock prices already pricing in the next two years of earnings. For retail investors, chasing hot stocks may face significant drawdowns. Therefore, professional advice is to adopt a dollar-cost averaging approach and diversify across different sectors.
Regarding the account opening process, Asian investors can now easily open US stock accounts through online brokers such as Futu, Tiger Brokers, or Interactive Brokers, with a minimum deposit as low as $500. However, tax issues need attention: non-US residents are subject to capital gains tax (0%, but dividend tax 30%), and holding for more than 183 days may trigger a change in tax status.
Conclusion: Why Buy US Stocks? The Inevitable Path of Globalization
Overall, in mid-2026, US stocks remain one of the most attractive equity markets globally. The bullish reasons include: solid corporate earnings, a strong dollar, sustained innovation, and unparalleled market depth. But investors must recognize that any single market has risks, and US stocks are no exception. A reasonable strategy is to include US stocks as part of core allocation, combined with Hong Kong stocks, A-shares, and fixed-income products, to achieve long-term stable returns.
"Buying US stocks is not about being 'pro-foreign', but an asset allocation decision based on data and logic," concluded Chen Weihong, founder of Singapore-based independent financial advisory firm Capital Asia. "When global capital flows in one direction, we in Asia have no reason to stay on the sidelines."