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Aging baby boomers could hold the key to a $1 trillion opportunity in the stock market, Mizuho says.
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Americans over the age of 75 are expected to make up 10% of the population by 2030, analysts said.
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Spending by the cohort, meanwhile, is expected to grow by over $1 trillion in the next five years.
There’s a $1 trillion opportunity brewing in the stock market. It’s not artificial intelligence, but another kind of AI.
The trend of “aging intelligence” was flagged this week by Mizuho’s US team. The Japanese bank says it expects big things to come out of the aging population in the US.
Specifically, older people will make a bigger portion of total consumer spending — a key theme for investors to tap into, Mizuho said in a report.
“Key opportunity — seniors will become a larger piece of the consumer spending pie, representing a ~1T opportunity,” analysts wrote. “Essentially, spending by the 75+ cohort will grow at 2x the US average.”
The number of Americans over 75 is expected to grow 4% each year, and is on track to make up 10% of the total population by 2030, Mizuho estimated.
Spending by consumers 75 and older will likely grow 87% from 2023 through 2030, rising by more than $1.3 trillion over that time frame. By 2035, spending by the cohort could rise by as much as $2.2 trillion, the analysts said.
“We see the Silver Tsunami (aging US population) as an under-appreciated trend,” the bank added. “Corporate America still needs to focus on this shift, and AI (Aging Intelligence) will be a differentiator.”
The bank said it had identified spending categories that would likely be “winners” of the aging population trade.
Medicines were poised to see the largest growth over the next five years, with analysts estimating that spending in the category could surge 2.5% year-over-year.
Insurance, hospitals, and medical devices were also “winning” categories in terms of consumer spending, Mizuho said, anticipating that the larger population of older Americans would drive greater demand in the coming years.
Analysts highlighted 10 companies they believed could benefit from the growing population trade. Together, the stocks could have an average upside of 35% over the next 12 months, the firm said.
The analysts’ top stock picks to tap into the trade are:
Ticker: BIIB
Ticker: DASH
Ticker: EHC
Ticker: EYPT
Ticker: HD
Ticker: HOOD
Ticker: GKOS
