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EUROPE DOMINATES AI AND BIG DATA FUND MARKET - MORNINGSTAR

Europe represents two thirds of the global AI and big data funds space, even though nearly all of the most frequently held AI and big data stocks are U.S.-listed and domiciled, a report from Morningstar finds.

Global assets in artificial intelligence and big data funds surged more than sevenfold over the past five years, rising to $38.1 billion by Q1 2025, the report says.

European AI fund assets were hovering near record highs of $22.7 billion by the end of May 2025. The region's dominance in the space reflects the broader thematic fund universe, says MorningStar.

"Unlike in the US, where AI funds are almost exclusively presented in an exchange-traded fund wrapper, most of the largest thematic funds in Europe are actively managed strategies in traditional mutual fund format."

So what exactly defines an AI stock?

Some megatech names may immediately spring to mind, but MorningStar says the real answer is more complex.

"This includes leaders in generative AI software, as well as specialized providers like Vertiv, which supplies the power and cooling infrastructure essential for AI data centers."

They say even traditional businesses like Walmart or Tesco can be considered as part of the broader AI investment theme, as they leverage large datasets and stand to benefit from deploying AI tools.

"..a comparison between the largest US and European AI funds reveals that they share just three holdings in their respective top 10, illustrating the range of interpretations of what constitutes an AI investment," says MorningStar.

(Lucy Raitano)

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