(Bloomberg) -- Weight-loss drug maker Novo Nordisk A/S hit a big milestone, becoming the second-ever European company to reach $500 billion in market value. And yet, it’s just another reminder that even the booming healthcare and tech shares of the region are no match for the growth that Wall Street stocks offer.

Denmark’s Novo surpassed the half-trillion mark for the first time on Wednesday, following luxury giant LVMH last year. While the feat stands out, Novo added $100 billion over the last four months during which AI powerhouse Nvidia Corp. rallied by $500 billion.

The ascent of the likes of Novo and ASML Holding NV to European megacaps are still major achievements in a market dominated until recently by slower-growing banks, commodity and consumer goods shares. The bad news though is that New York’s stable of glamorous tech names is expanding much faster, and now boasts six firms with a market value of over $1 trillion. 

The biggest of those, Microsoft Corp., is worth $3 trillion, roughly the market value of the top 10 European companies put together.

“The US equity market dominance is breathtaking and the US versus Europe outperformance over the past decades, as digitalization took hold, is excessive,” said Peter Garnry, head of equity strategy at Saxo Bank AS. “The question is: will it change?”

Within the tech space, Europe’s biggest name is ASML. The company is now worth about $350 billion and its sophisticated machines are seen as key to the global chipmaking industry. But it’s a minnow compared with the US Magnificent Seven, whose shares rallied more than 100% in 2023, powered by explosive demand for artificial intelligence applications. 

The AI frenzy last year brought Nvidia into a tech superpowers group that already contained the likes of Microsoft, Apple Inc. and Tesla Inc.

Europe remains skewed toward financials and industrials, while the region overall is plagued by lackluster economic growth. That’s showed up in earnings, which grew by 60% in the past decade while those in the US have doubled. It’s also reflected in share valuations, with Europe’s top ten companies trading at 27 times expected earnings, versus 32 times for American peers.

“Unless Europe can channel its resources toward changing its technology and innovation environment, it will continue to dwindle in terms of equity-market weight in a global context,” said Hani Redha, portfolio manager for global multi-asset at Pinebridge Investments Europe Ltd.

Things can change fast though, according to Garnry. He highlights Europe’s health care, robotics and energy technology companies as potential future winners. Novo shares extended their rally on Thursday, adding 1% and bringing gains to almost 7% for the week. 

“History tells us one thing, and that is that the top 20 companies today will most likely not be the top 20 companies in 20 years from now,” Garnry said. “The question is whether Europe’s corporate sector has a chance to stage a multi-decade comeback against US companies.”

--With assistance from Thyagaraju Adinarayan and Julien Ponthus.

(Updates with Novo’s Thursday share-price move.)

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