Personal Finance
AI stock boom widens U.S. investing wealth gap
Oscar Wong | Moment | Getty Images
U.S. stocks have been on a tear in recent years, largely on the back of euphoria around artificial intelligence. But not everyone has participated in the runup: Stock wealth has largely accrued to the wealthiest U.S. households.
Even with recent choppiness, the S&P 500 U.S. stock index is up about 16% over the past year. Total wealth from publicly traded stocks has risen by $8 trillion or so during that time, said Mark Zandi, chief economist at Moody’s.
The top 20% wealthiest U.S. households own nearly 93% of all stock — meaning they get the lion’s share of any stock market gains, according to calculations by Edward Nathan Wolff, an economics professor at New York University who studies income and wealth distribution.
“Stock ownership is still heavily concentrated among the rich — the very rich, in fact — and poor families have basically been left out of the picture,” Wolff said.
“As the stock market goes up, it really widens the wealth and income gap,” Wolff said. “It’s a big part of the inequality story.”
‘A huge, huge gap’
Of course, this isn’t to suggest that AI is the lone reason the stock market has risen, or that it alone is the source of the U.S. wealth gap.
But it exacerbates other tensions at play, and has implications for politics and the broad U.S. economy, Zandi said.
For one, a widening gulf between the haves and have-nots could create more “political fracturing,” making it harder to reach consensus, he said.
“They have different needs and perspectives, and therefore policy desires,” Zandi said. “You can feel it in our politics today — even in our ability to keep the government open.”
The dynamic also fuels a bifurcation in spending, he said. The U.S. economy is more reliant on the spending of a relatively small group — the wealthy — leaving it more vulnerable if “something were not to stick to script for that group,” Zandi said.
The top 1% owned half — or $25.6 trillion — of the total $51.2 trillion of corporate stock and mutual fund shares in the second quarter of 2025, according to the most recent Federal Reserve data. The average person in the top 1% has almost $37 million in net assets, Wolff said.
Meanwhile, the bottom 50% of households collectively held just 1% — or $540 billion — of that stock and mutual fund wealth.
“There’s a huge, huge gap,” said John Sabelhaus, senior fellow of economic studies at the Urban-Brookings Tax Policy Center and a former research official at the Board of Governors of the Federal Reserve System.
“Stock ownership is very low at the bottom of the income distribution,” he said.
AI isn’t the only boom affecting wealth
Much of stocks’ growth is attributable to the so-called AI boom.
The stocks of companies tied to artificial intelligence have accounted for roughly 75% of S&P 500 returns since ChatGPT launched in November 2022, Michael Cembalest, chairman of market and investment strategy for J.P. Morgan Asset Management, wrote on Sept. 24.
“AI stocks have gone stratospheric over the last three years,” Zandi said.
Even when lower-wealth households have stock, their holdings are relatively small, Wolff said.
For example, about a fifth of the poorest 20% of households own stock, he said. But just 5% own $10,000 or more, compared to nearly all of the richest households, he said.
Wolff analyzed data from the Federal Reserve’s triennial Survey of Consumer Finances. The analysis includes direct stock ownership, as well as stock held indirectly in sources like workplace retirement plans.
Households with less wealth don’t have the resources to save, and so can’t afford to buy as much stock, according to financial experts.
Meanwhile, the wealthy have more discretionary income and financial resources, and can afford to take more risk with their savings and investments, they said.
Despite the AI-driven stock market boom, the wealth gap has actually decreased for the middle class relative to the richest households due to a runup in housing prices, Wolff said.
“The housing market, at least until recently, has been booming,” he said.
For example, the 50th to 90th percentiles by wealth own about half — or, $23 trillion — of total real estate, according to Fed data.
Overall stock ownership among lower earners has increased slightly in recent years, a dynamic that tends to happen when stocks perform well, said Sabelhaus, citing Fed data.
There’s also been a push to make it easier for consumers of all wealth levels to invest, as apps and certain investments have lowered the barrier to entry.
‘Double-edged sword’ of stock ownership
And stock ownership is “always a double-edged sword,” said Sabelhaus of the Urban-Brookings Tax Policy Center. While the stock market’s value has historically increased over long periods of time, the wealthy bear more of the shorter-term financial risk if the market falls, he said.
Indeed, if AI demand were to “falter,” “we doubt non-tech firms would rescue the market,” James Reilly, senior markets economist at Capital Economics, wrote in a research note on Nov. 4.
Certain households, like those carrying a lot of high-interest debt or saving to buy a home, may be better off directing their money toward interest payments or a down payment instead of the stock market to minimize financial losses in the short term, Sabelhaus said.
“If someone said, ‘I make $50,000 a year, I have student loans and credit card debt, should I be investing in AI or crypto?’ I’d probably say no,” he said.
“I think in general it’s fair to say, if you can take on the risk, then you should take on that risk to enjoy the higher rate of return,” he added. “But it’s a trade-off.”
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