This is part of our monthly series. Catch up on last month’s summary here: What happened to global investment markets in September 2025?
In October 2025, the world’s largest technology companies reported their Q3 earnings. This marked another milestone in the ongoing artificial intelligence (AI) boom.
Nvidia made history by becoming the world’s first $5 trillion company - by becoming the world’s first $5 trillion company—a sign of how strongly investors back AI’s long-term growth.
US technology companies now account for a significant share of global stock markets. The United States represents around 70% of one of the major global stock markets - the MSCI World Index. While the information technology sector makes up roughly 27% and $25.7 trillion of it.
To put these valuations in perspective, Nvidia is now worth more than the individual GDP of each of the UK, Japan and India. That means this single company is valued at more than the total annual economic output of each of these countries
Keep reading to find out what happened to markets in October, how earnings are supporting performance, and what this could mean for your PensionBee plan.
What happened to stock markets?
In the UK, the FTSE 250 Index fell by around 0.4% in October. This brings the 2025 performance close to +7%.
Source: Google Market Data
In Europe (excluding the UK), the EuroStoxx 50 Index rose by 0.49% in October. This brings the 2025 performance close to +17%.
Source: Google Market Data
In North America, the S&P 500 Index rose by over 2% in October. This brings the 2025 performance close to +15%.
Source: Google Market Data
In Japan, the Nikkei 225 Index rose by over 9% in October. This brings the 2025 performance close to +20%.
Source: Google Market Data
In the Asia Pacific (excluding Japan), the Hang Seng Index fell by almost 3% in October. This brings the 2025 performance close to +27%.
Source: Google Market Data
Valuations and the rise of US tech
The ‘Magnificent Seven’ (Nvidia, Apple, Microsoft, Alphabet, Amazon, Meta, and Tesla) now represent:
around 22-25% of the MSCI World Index;
more than one-third of the S&P 500’s total market value; and
have a combined market value that’s approaching the entire GDP of China - which is $19.4 trillion.
This level of concentration is historically high. For global investors, that means roughly one in every four pounds or dollars could be tied to the fortunes of a small group of US companies. It’s left many wondering whether we’re all overexposed to an AI bubble that’s set to burst.
Views in the market remain mixed
Some commentators believe technology valuations have climbed too far and are overdue for a correction or price reset. Concerns are growing that the rapid rise in technology shares has outpaced what company earnings can justify over time.
However, others argue that these valuations reflect the genuine long-term potential of a technological revolution. Analysis suggests that AI-driven gains could support corporate profits across multiple sectors in the years ahead.
Investment managers note that strength in technology shares is shown in earnings growth, rather than by speculation alone, in particular from firms leading in cloud computing and semiconductor production.
The earnings season in October reflected this divide clearly. Companies that demonstrated strong revenue growth from their AI investments saw their share prices rise, while those with heavy spending but fewer immediate returns faced sharper declines.
How does this affect pensions?
When Nvidia became the most valuable company in the world in October, its weight in the MSCI World Index increased to over 5%.
Pension funds tracking that market value weighted index automatically increased their Nvidia holding. This occurred not because fund managers decided to buy more Nvidia stock off the back of Q3 earnings results, but because Nvidia’s free float market capitalisation grew relative to other companies in the index.
All pension savers invested in global equity funds have seen their exposure to the largest US technology companies increase over time. For Nvidia this is particularly pronounced, as its stock has risen in value by more than 1,200% in the past five years.
As each of the technology firms have grown in value, they’ve taken up more space in global indices - and therefore in the pensions that track them.
The long-term perspective
Rapid valuation changes can draw attention, but they’re a normal part of long-term investing. Over time, share prices tend to reflect the real value companies create, not the excitement or concern of individual months.
Technology cycles have often followed a familiar pattern, for example:
a period of heavy investment;
some consolidation; and
years of productivity once new infrastructure is in place.
The same was true for railways, internet networks, and mobile technology. Each brought early stock market volatility, followed by long-term gains in global productivity.
It’s too soon to know exactly how AI will reshape economies, or which companies will benefit most.
But history shows that patient, diversified investing - staying in the market rather than reacting to short-term shifts - has often proven the more resilient path for long-term savers.
Have a question? Get in touch!
Do you want to know more about your pension plan with PensionBee? You can check out our Plans page to learn how your money is invested in different assets and locations, or log in to your BeeHive to see your specific plan. You can always send comments and questions to our team via engagement@pensionbee.com.
Risk warning
As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.
