Should Investors Bet on the Next Generation of US Stock Market Superstars?

America marks 250 years since independence this weekend, with the usual mix of barbecues and fireworks — plus a surge of attention around what many are calling the celebrity wedding of the decade, as pop star Taylor Swift marries American football player Travis Kelce in New York.

Interest in the ceremony has spilled far beyond the gossip pages, with everything from the A-list guest list to the fashion choices drawing scrutiny. On prediction markets Polymarket and Kalshi, users have reportedly staked as much as $4 million on details surrounding the nuptials.

Wall Street also appeared to join the celebrations this week, as the Dow Jones Industrial Average of 30 blue-chip stocks closed above 52,000 for the first time, helped by the performance of its newest constituent, Alphabet, the parent company of Google.

Alphabet shares have climbed 13 per cent so far this year to $356, despite market chatter suggesting the company may be grappling with limited “compute access” — the critical capacity needed to store, process and move vast quantities of data at speed.

The company has declined to comment, but the speculation has sharpened a broader concern hanging over this anniversary year: the enormous sums being poured into artificial intelligence by the technology giants.

Against that backdrop, some investors may be tempted to step away from the American stock market’s festivities. But is now really the moment to declare financial independence from US equities? Here, we consider the choices facing investors.

Don’t bet against America

Within a century of declaring independence in 1776, the United States had become the world’s largest economy. Its ascent is captured in long-run stock market data assembled by US economist Robert Shiller, whose reconstructed S&P 500 series reaches back to 1871, even though the index itself was not formally launched until the 1950s.

That year the index stood at 4.4. It is now 7,483, having rebounded from the Wall Street crash of 1929 and subsequent slumps. $100 invested in 1871 would have turned into $170,000, which is a 169,900pc return – and that’s before dividends. These results are a reminder of America’s eminence, as Jason Hollands of Bestinvest points out. 

‘The US is not only the world’s largest market,’ he says, ‘it is also home to many of the world’s leading firms in communications, healthcare and technology, whose products and services many of us use every day.

Increasingly, the US is also the stock market of choice for many British businesses that were previously listed in London but that have moved to New York. 

Flutter, the gambling group that owns Betfair, Paddy Power and US brand FanDuel, is the latest to say goodbye to London in favour of New York. British shareholders will be crossing their fingers the move reverses the 52 per cent fall in Flutter shares over the past six months. But this hope may be dashed by the view that Kalshi and Polymarket, founded in 2018 and 2020 respectively, are set to disrupt traditional betting. 

Yet another reminder the US is a global innovation powerhouse – on which you should be placing some bets. 

250th birthday winners

The rewards of betting on the US in the first half of 2026 have been considerable. Companies specialising in memory technology – crucial to the operation of AI – have soared. SanDisk, Micron and Western Digital, three of the major players, have jumped by 635 per cent, 242pc and 200pc respectively this year. 

What’s more, analysts believe SanDisk shares remain a ‘buy’ and that they could increase from their current $1,745 to $2,500, the target price set by Bank of America this week. 

These figures indicate that Silicon Valley, which is home to SanDisk and most technology giants, is still a land of opportunity. But it also makes sense to extend your exposure to other parts of America and different industries. 

Future stars

Fund managers are busy this summer, as this column has reported, scouting out the next set of US superstars. 

David Harrison, of the Rathbone Greenbank Global Sustainability Fund, highlights API, the $18.4bn Minnesota-based building fire and safety testing company. Analysts rate the shares a ‘buy’ at $42. Cameron Shanks, of the Aegon Global Equity Income fund, picks engine maker Cummins. Its natural gas engines are much in demand, as they help provide the round-the-clock power required by data centres, which underpin AI systems. 

Analysts at UBS believe that Cummins shares could rise from $662 to $850. If you like the sound of a company with a sideline in tech, Monolithic Power Systems is among your options. Joseph Stephens, of the Guinness Global Quality Mid Cap fund, says this Florida-based company makes the semiconductors required by data centres’ extensive electronic systems. Analysts forecast that Monolithic shares could rise from $1,288 to as high as $2,000. 

Teradyne is another company with a tech sideline. The Massachusetts corporation has two divisions: Semiconductor testing and robotics. 

It is the world leader in ‘cobots’, which work alongside humans. Teradyne shares, which have soared by 91pc this year to $369, could move further upwards to $550, according to analysts. Edwards Lifesciences is Stephens’ ‘medtech’ selection. 

At $94, these shares are considered a ‘buy’ because of the company’s leading position in the transcatheter aortic valve replacement market. These devices are an alternative to expensive open heart surgery. 

Fantastic funds

Hollands says an S&P index tracker fund, which mimics the index’s constituents, is the best choice for younger investors. He likes the State Street SPDR S&P 500 UCITS ETF (exchange traded fund) where the charges are just 0.03pc a year. 

If you already have money in global or US funds, their portfolios may be mostly made up of Amazon, Apple and the other ‘mega-cap’ tech groups. Hollands suggests that anyone who wants a less concentrated choice should look at the RAFI US Fundamental Value UCITS ETF, which invests in the 1,000 largest US-listed companies, weighting those holdings based on sales, cash flow and book value. 

The Legal & General S&P 500 US Equal Weight Index Fund could be another way to extend your US horizons. If you are interested in companies that have been overshadowed by the Silicon Valley titans, Darius McDermott, of FundCalibre, proposes the GQG Partners US Equity fund and the Schroder US Mid Cap fund, which includes food services group Aramark, whose shares have leapt by 53pc since January. 

It provides accommodation and catering for workers on remote data centres. If you want to steer clear of tech, but could be attracted by biotech, McDermott recommends Polar Capital Healthcare Opportunities. 

Its largest stake is pharmaceutical company Eli Lilly, maker of weight-loss drug Mounjaro. In 2026, even more Americans will be prescribed this medication, which is regarded as a ground-breaking treatment and an example of American innovation.