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Non-U.S. Tech Growth Outpaces U.S., Thornburg Says

BY | ETF Database
9:37 am ET 08/05/26 | 4 VIEWS
International technology companies are on track to deliver faster earnings growth than their U.S. counterparts through 2028.Key Takeaways: Non-U.S. tech earnings could grow 58% annually through 2028, versus 35% for U.S. tech. Hyperscalers plan to spend nearly all their cash flow on AI infrastructure in 2026. Vietnam’s exports grew 26% year over year after 2025 tariffs took effect; Korea’s rose 11%. Consensus estimates call for non-U.S. technology stocks to grow earnings by an average of 58% annually through 2028. That’s well ahead of the 35% pace projected for U.S. tech, said Matt Burdett, head of equities at Thornburg Investment Management, in a recent mid-year outlook. See more: Thornburg Eyes International Stocks as US Market Narrows Burdett’s report ties that gap to how U.S. hyperscalers are funding their AI buildout. Large technology companies including Oracle Corp. (ORCL) and Meta Platforms, Inc. (META) are projected to spend nearly all of their operating cash flow on data centers and equipment in 2026. That rapid spending pace has made this group the largest issuer of new corporate bonds this year. Despite the spending, AI providers have yet to prove their business models can turn a consistent profit, Burdett wrote. AI models have generated real revenue, but the scale of spending has also created bottlenecks in chips and infrastructure that resemble scarce-resource pricing. That’s the backdrop for Thornburg’s case for active management abroad. The firm runs the Thornburg International Growth ETF (TXUG ), which targets non-U.S. companies posting faster earnings growth without the debt hyperscalers are taking on to fund AI spending.Export Growth Fuels International TechExport growth in some of those countries has outpaced the broader trend, Burdett wrote. Vietnam’s exports climbed 26% year over year in the 12 months after the Trump administration’s April 2025 tariffs took effect, while South Korea’s exports grew 11% over the same stretch. Both countries are benefiting from supply chains shifting away from the U.S., according to Thornburg. Neither is taking on the debt load tied to building AI data centers. Key economic indicators, including oil prices, Treasury yields and the U.S. Dollar Index, also normalized quickly after this year’s disruptions, Burdett noted. They moved faster than they did following prior energy shocks, offering a steadier backdrop for corporate earnings abroad. This growth gap is not universal. Outside of the technology sector, U.S. companies are projected to grow earnings by 12% a year through 2028, edging out the 10% pace expected for international companies, according to the report. For more news, information, and analysis, visit our Portfolio Strategies Content Hub.

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