During Trump’s current term, European and Chinese tech firms are making a big comeback. After years of pressure from trade wars and strict regulations, they’re bouncing back. In 2025, both European and Chinese stocks are outperforming the S&P 500 (SPY), drawing fresh attention from investors.
Meanwhile, U.S. tech giants are losing their edge. The “Magnificent Seven stocks,” Alphabet (GOOGL), Amazon (AMZN), Apple (AAPL), Meta (META), Microsoft (MSFT), Nvidia (NVDA), and Tesla (TSLA), rallied after the 2024 election. But unfortunately, that rush is slowing down.
For example, let’s take Tesla. Its stock surged after Trump’s win, partly due to Elon Musk’s ties to the new administration. But since peaking in mid-December, the stock dropped over 27% year-to-date, reflecting the fading momentum of U.S. tech.
China’s Stocks Rise on AI Boom and Government Support
China’s stock market is heating up. The Invesco China Technology ETF (CQQQ) has returned 15.74% year-to-date, crushing the S&P 500’s 1.38% gain over the same period.
One major factor driving China’s gains is government stimulus. New measures aimed at boosting the economy are reviving investor confidence, especially in Chinese firms listed abroad. At the same time, fresh policies from China’s financial regulators are encouraging foreign investors to return.
Tech stocks in China are leading the charge. Companies like Alibaba (BABA) are benefiting from the country’s push into artificial intelligence. This momentum has lifted the Hang Seng Index by 38% over the past year and over 16% year-to-date. Meanwhile, Chinese electric vehicle (EV) makers are also on the rise. EV players such as BYD (BYDDF), Li Auto (LI), and XPeng (XPEV) are all seeing strong delivery numbers for February, reflecting a surge in consumer demand and renewed investor optimism.
Europe Stocks Gain as Investors Look for Value
Alongside Chinese stocks, European stocks are also quietly outpacing U.S. markets, and it’s easy to see why. Their lower valuations compared to U.S. tech giants are attracting investors looking for better returns. For instance, the MSCI Europe Index, which tracks major companies across 15 developed European countries, has climbed 6.84% year-to-date, reflecting this upward trend.
With U.S. tech losing steam, investors are looking abroad, and Europe and China are delivering where it counts.