Why UK Investors Should Consider US Stocks
The US stock market offers some of the best investment opportunities in the world, with access to high-growth technology companies, strong dividend payers, and diversified industries. For UK investors, investing in US stocks provides exposure to global leaders like Apple, Microsoft, Nvidia, and Coca-Cola which historically have offered massive returns compared to UK Stocks.
We will cover today:
- Why UK investors should buy US stocks
- The best US stocks for growth and dividends in 2025
- How to invest in US shares from the UK
- Tax implications for UK investors buying US stocks
Quick Answer:
- Some of the best US growth stocks for UK investors include Nvidia, Microsoft, and Amazon.
- The best dividend-paying US stocks include Coca-Cola, Johnson & Johnson, and Procter & Gamble.
- UK investors can buy US stocks through platforms like Hargreaves Lansdown, Interactive Brokers, and Trading 212.
- Filing a W-8BEN form reduces US dividend tax from 30% to 15% for UK investors.
Why UK Investors Should Buy US Stocks in 2025
The US stock market outperforms most global markets, including the FTSE 100. Historically, the S&P 500 has delivered an average annual return of around 10%, while the FTSE 100 has averaged closer to 6-7%.
Investing in US stocks allows UK investors to:
- Gain exposure to the biggest global companies in technology, healthcare, and consumer goods.
- Diversify away from UK stocks, which are heavily weighted in financials and energy.
- Access higher growth stocks that can deliver stronger long-term returns.
Best US Stocks for UK Investors in 2025
1. Nvidia (NVDA) – AI and Semiconductor Leader
Nvidia is the dominant force in AI, gaming, and data centre technology, making it one of the best growth stocks in 2025. The company’s AI chips power ChatGPT and other AI applications, ensuring long-term demand.
- Why buy? Nvidia benefits from the AI boom, cloud computing growth, and gaming expansion.
- Stock performance: Up over 200% in 2023 and in 2024. In spite of DeepSeek sell off, it is still look as the clear winner on the AI revolution so we are expecting continuing strong momentum.
- Risk factor: Highly valued, meaning potential volatility.
2. Microsoft (MSFT) – Cloud Computing and AI Growth
Microsoft remains one of the most dominant tech companies, leading in cloud computing (Azure), AI (OpenAI partnership), and enterprise software.
- Why buy? Stable revenue, strong earnings, and leadership in AI integration.
- Stock performance: Consistent 15-20% annual growth over the past decade.
- Dividend yield: 0.9%, with steady growth.
3. Amazon (AMZN) – E-Commerce and Cloud Powerhouse
Amazon dominates global e-commerce and cloud computing (AWS), making it a strong long-term investment.
- Why buy? Expanding in AI, logistics, and digital advertising.
- Stock performance: Recovered from lows in 2022 losses and showing strong upside.
- Risk factor: Faces regulatory scrutiny and competitive pressure.
4. Tesla (TSLA) – Leading the Electric Vehicle Revolution
Tesla remains the market leader in EVs, with growth potential in autonomous driving, energy storage, and AI-powered robotics.
- Why buy? Long-term innovation in EVs, AI, renewable energy and Robots! That would be interesting how can affect the stock if successful.
- Stock performance: Volatile but maintains strong growth potential.
- Risk factor: Increased competition from Chinese EV manufacturers.
5. Alphabet (GOOGL) – Dominating AI and Digital Advertising
Google’s parent company remains the leader in search engines, cloud computing, and AI innovation.
- Why buy? Strong revenue from Google Ads, YouTube, and cloud services.
- Stock performance: Stable growth with long-term AI investment.
- Risk factor: Regulatory scrutiny over AI dominance.
Best Dividend Stocks for UK Investors in the US Market
6. Coca-Cola (KO) – Reliable Consumer Staple
Coca-Cola is a classic dividend stock, providing stable returns and strong global demand.
- Why buy? Recession-proof business model with global brand recognition.
- Dividend yield: 3.2%, with 60+ years of dividend growth.
- Stock performance: Slow but steady appreciation.
7. Johnson & Johnson (JNJ) – Healthcare and Pharmaceuticals
Johnson & Johnson is one of the most stable defensive stocks, offering consistent dividend growth.
- Why buy? Leading position in medical devices, pharmaceuticals, and consumer health.
- Dividend yield: 2.9%, increasing for 60+ years.
- Stock performance: Defensive stock with lower volatility.
8. Procter & Gamble (PG) – Household Essentials and Dividend Growth
Procter & Gamble is a consumer goods giant, selling everyday essentials like shampoo, toothpaste, and cleaning products.
- Why buy? Recession-resistant with strong brand loyalty.
- Dividend yield: 2.5%, growing consistently.
- Stock performance: Steady growth, low risk.
How UK Investors Can Buy US Stocks
Best Platforms to Buy US Stocks in the UK
- Hargreaves Lansdown – Offers a large selection of US stocks but has higher fees.
- Interactive Brokers – Low-cost trading for frequent investors.
- Trading 212 – Commission-free trading for beginners.
- Freetrade – Easy-to-use app with access to US shares.
How to Reduce Tax on US Stocks as a UK Investor
- Submit a W-8BEN form to reduce US dividend tax from 30% to 15%.
- Hold US stocks in an ISA to avoid UK capital gains tax. We did a bit of review about tax for crypto and stocks gains in the UK
- Use a SIPP if investing for retirement, as this eliminates dividend tax.
Portfolio Strategy: Balancing US Growth and Dividend Stocks
For UK investors, a balanced US stock portfolio can provide both growth and stability.
| Stock Type | Example Stocks | % Allocation |
|---|---|---|
| High-Growth Tech | Nvidia, Microsoft, Amazon | 40% |
| Stable Dividend Payers | Coca-Cola, Johnson & Johnson, Procter & Gamble | 30% |
| Defensive Stocks | Walmart, McDonald’s | 20% |
| Cash & Safety Assets | Gold ETFs, Bonds | 10% |
The Best US Stocks for UK Investors in 2025
For UK investors, US stocks offer higher growth, better diversification, and more opportunities than the UK market.
- Best growth stocks: Nvidia, Microsoft, Amazon, Tesla, Alphabet.
- Best dividend stocks: Coca-Cola, Johnson & Johnson, Procter & Gamble.
- Best strategy: Combine high-growth US stocks with dividend-paying defensive stocks.
To maximise returns, remember that as UK investors should file a W-8BEN form to reduce US dividend tax and hold US stocks in an ISA or SIPP for tax efficiency.
Which US stocks are in your portfolio for 2025? Let us know in the comments!
