According to a note from Goldman Sachs, which analyzed the reports of the 500 companies in the index, only one sector derives more than half of its revenue from outside the US: tech, with an average of 56%, driven by semiconductors (67%).

However, it is impossible to claim that there is a sector bias: the 50 most international companies cover 11 sectors and the basket is rebalanced according to revenue. They include Netflix (59% of revenue from abroad), Meta (64%), Mondelez (74%), Estée Lauder (75%), Visa (59%) and Mastercard (70%). Their median exposure to foreign markets is 70%.

Since January, international companies have gained an average of 10.8%, compared with only 3.6% for "domestic" companies. Meanwhile, the US index has climbed 7% since the beginning of the year.

Stronger momentum

Beyond the dollar and other cyclical factors, global groups are benefiting from stronger growth momentum.

Revenue growth in the fourth quarter of 2024 already showed this trend: companies with more than 50% international exposure posted much stronger growth than those with less than 50% exposure.

Revenue growth in the fourth quarter of 2024 in the S&P 500 based on international exposure. Green> 50% exposure to foreign markets and blue < 50% (source: Factset, February)

The dollar effect

The dollar has amplified the movement. It had its worst half-year since 1973, weakening by 7% (weighted according to trade). Mechanically, US exports are benefiting.

Change in the trade-weighted dollar over the past year (Source: MacroMicro)

But the effect is two-edged: US importers are suffering. Companies that depend on raw materials, components or spare parts from abroad, while selling mainly in the US, are among the big losers in this trend.

The most international stocks

Some S&P 500 companies generate almost 100% of their sales abroad:

https://www.marketscreener.com/news/s-p-500-international-business-boosts-performance-up-7-compared-to-domestic-business-ce7c5cd2dc8af324