Record foreign investment flows into US stocks despite $34 trillion debt

War-like conditions around the world are affecting the economies of nearly every country, and the United States is no exception. US debt has continued to rise and currently stands at 34 trillion dollars. Yet despite this heavy debt burden, the US appears to be in a different position from other countries, as foreign investors keep pouring money into it.

According to July figures, foreign investors held a total of 24.32 trillion dollars in US equities. This is being described as the third-largest such figure in history. Since the start of the year, foreign investment in US equities has risen by 2.22 trillion dollars, or 10 percent.

Compared with 2022, the figure has risen by 12.3 trillion dollars, or 103 percent. As a result, foreign investment in US equities has reached 60 percent of the country's total economic wealth, a record in itself. This figure is about 6 percentage points higher than the peak seen during the dot-com bubble of 2000. In other words, foreign investors currently have a tremendous interest in US equities.

The biggest reason cited for this is the United States' heavy investment in artificial intelligence, or AI. AI-linked stocks around the world have seen sharp gains recently. Investors globally are putting money into this US-led AI rally because the United States has the world's strongest technical infrastructure, a large financial market, and strong expectations of rising productivity ahead.

Major companies such as Microsoft, Alphabet, Meta and Amazon are making big bets on AI in the United States. Hardware sector giants such as Nvidia hold control over artificial intelligence infrastructure worldwide. Chipmaking and digital infrastructure companies in the US are posting record profits, with strong earnings per share as well. These are the reasons why investors around the world are continuing to put money into the United States.