Value investing, a strategy born in the United States nearly a century ago, is experiencing a renewed period of outperformance in 2025. After years where growth stocks—especially in technology—dominated the market headlines and returns, value-focused investors are finally seeing substantial gains. However, there’s a crucial caveat that affects American investors specifically. This resurgence in value investing is much more pronounced overseas than it is in the U.S. market. While U.S. value stocks are performing better, the real winning streak is happening internationally, where value shares are outpacing not just their American counterparts but also the domestic growth giants like Nvidia.
This shift reflects both cyclical market trends and a reaction to global events, macroeconomic changes, and shifting investor sentiment. Elevated interest rates and concerns about inflated tech valuations have prompted more investors to diversify into sectors and regions long neglected by the market’s enthusiasm for growth. At the same time, inflation and persistent global economic uncertainty have reminded many that value investing’s foundational principles—like focusing on strong balance sheets, cash flow, and undervalued assets—remain essential tools for managing risk.
For American investors, the lesson is clear: a diversified approach that includes international value stocks could be crucial in capturing the full benefits of this market rotation. The one catch for those based in the U.S. is that simply focusing on familiar, domestic names might mean missing out on the most impressive value-driven returns now unfolding across global markets.