Second half could be shaped by expanding price-to-earnings multiples in U.S. and continued momentum across emerging markets
NEW YORK, July 08, 2026–(BUSINESS WIRE)–With equity markets reaching new highs and credit spreads tightening, Global X Management Company LLC (“Global X”) views the U.S. economy with broad optimism. At the same time, Global X sees both value and momentum across select emerging markets through the remainder of 2026.
“Earnings per share for S&P 500 companies have been revised upward by 8%, accounting for the bulk of year-to-date returns. Profit margins have also been revised higher – they’re on pace to expand for the fourth straight year, helped by first-quarter earnings growth of nearly 30% year-over-year,” said Scott Helfstein, Head of Investment Strategy at Global X.[i]
“The positive outlook in the U.S. is being propelled by AI-driven automation as investments in processing capacity are expected to fuel greater efficiency. This margin expansion is precisely where we expect AI’s benefits to show. Our expectations call for improved profit margins in small- and mid-cap companies after years of stagnant margins,” he added.
The AI build-out is driving demand for AI solutions in multiple industries. Existing data center and digital infrastructure companies, which already possess stocks of components, are among the sectors that could benefit from sustained demand. Hardware, such as memory and storage, is another. Raw material inputs such as copper, lithium, and rare earths could also see sustained demand.
Finally, one less obvious beneficiary of this unique demand cycle is infrastructure development. Historically, it has been cyclical due to government spending programs. But now the private sector is financing digital infrastructure and data center investments.
Emerging Markets
In Global X’s view, emerging markets (EMs) could also offer notable exposure to the AI ecosystem. Semiconductors, power, and electrification represent key parts of various emerging market economies.
“We believe commodities are a core part of the EM story. They also share many of the same macro-economic drivers as EM economies, including the direction of the U.S. dollar and the strength of global economic activity,” said Malcolm Dorson, Head of Active Investment at Global X. “We believe the combination of years of EM under-investment and accelerating demand from these long-term growth themes could set the stage for another strong cycle.”
On the sovereign front, Dorson believes there’s potential for valuation improvement in Brazil, Colombia, and Argentina.
