US Stock Market in 2025:Year in Review and Positioning with Three High-Conviction Equity Themes for 2026

The past year reminded investors that markets can stay resilient even when the macro signals feel contradictory. The S&P 500 is currently up about 16% for 2025, supported by a steady stream of earnings beats, a softening inflation backdrop, and persistent strength in the mega-cap technology cohort. Pullbacks were quickly absorbed as the index staged a 3.7% rally at the end of November, driven largely by communication services and semiconductor leaders.

Technology once again played the role of locomotive. Nvidia, Meta, Alphabet, and Apple all delivered double-digit gains through the fall, while Boeing surprised late in the year with strong aircraft delivery projections that helped industrials participate in the rally. Underneath the surface, inflation moderated to 2.7% in producer prices by September, payrolls slowed, and jobless claims dipped to levels not seen since 2022.

Markets interpreted this as confirmation that the Federal Reserve would continue easing in December, with traders pricing in nearly 90% odds of a 0.25% rate cut. The Fed’s acknowledgment of a cooling labor market and fading inflation risks further greased the wheels for a risk-on tone.

With that backdrop, investors are now shifting toward the themes and sectors that are positioned to lead in 2026.

Three macro debates will sit at the center of investor thinking: the appointment of a new Fed Chair and the path of rates, the health of the US consumer as inflation remains somewhat sticky, and the durability of tech sector earnings with valuations already stretched.

In this context, three companies we currently own in our stock based portfolio stand out as structurally aligned with the next decade’s dominant growth curves rather than the next quarter’s sentiment swings: GE Vernova, Broadcom, and Eli Lilly.

Investment Themes for the Next Decade

GE Vernova: A Pure Play on the Energy Shortage Created by AI

The power generation industry is no longer a slow-growth utility story. Global electrification and AI computing are pushing demand curves sharply higher. Industry research projects that the global power generation market could roughly double from about $2.3 trillion in the mid-2020s to over $4.5 trillion in the mid-2030s, an 8% – 9% percent annual growth rate. Data center electricity usage is on track to increase 2-2.5 times by 2030, accounting for 10% – 12% percent of global demand.

GE Vernova is situated right at this bottleneck. Its Power, Wind, and Electrification segments target the fundamental constraint that AI, cloud computing, and industrial electrification all share: the need for more reliable generation and a modern grid to carry it. Management expects revenue of $36 to $37 billion in 2025, with mid-single-digit growth in Power and mid-teens growth in Electrification.

Operations are already inflecting. Orders rose 55% year over year to $14.6 billion in the recent quarter, while backlog increased by more than $6 billion. Gas Power slot reservations have climbed from 55 to 62 GW, giving visibility into multi-year demand. Electrification revenue grew more than 30% year over year, helped by grid upgrades across North America, Europe, and the Middle East, and segment margins expanded meaningfully.

Risks include policy shifts in renewables, execution challenges in improving the profitability of its Wind business, and gas-fired power cyclicality if global decarbonization accelerates faster than expected.

Broadcom: Toll Operator on the AI Super-Cycle

Semiconductors remain the heart of the AI investment wave. The global chip market is expected to grow from about $700 billion in 2025 to more than 1.1 trillion dollars by 2033, a compound growth rate of 6% – 7%. The fastest-growing pocket is the AI segment, where analysts forecast high double-digit annual growth throughout this decade. Capex for leading-edge AI chip production alone is expected to grow at an 18% rate to about $50 billion by 2028.

Broadcom is one of the clearest beneficiaries. Its custom ASICs for hyperscalers and its high-end networking chips form the core infrastructure of AI clusters. Coupled with the stickiness of VMware’s software stack, Broadcom has positioned itself across both the physical and virtual layers of the AI ecosystem.

Fiscal 2024 revenue climbed 44% year over year to $51.6 billion. AI revenue increased more than threefold to $12.2 billion and continues to accelerate. In the most recent quarter, AI semiconductor revenue grew more than 60% year over year to over $5 billion, and management expects that figure to rise again in the next quarter. For 2025, total AI revenue is projected to approach $20 billion, representing more than one-third of total company sales. Consensus expects Broadcom’s consolidated revenue to grow more than 20% in 2025, led by AI and networking strength.

Risks include valuation sensitivity after a strong rerating, heavy dependence on a few hyperscaler customers, and scrutiny related to VMware’s integration and pricing decisions.

Eli Lilly: Dominant in the Fastest-Growing Segment of Global Pharma

If power and semiconductors are the infrastructure plays of the AI era, Eli Lilly is the purest large-cap beneficiary of the metabolic health revolution. GLP-1 drugs for obesity and diabetes are scaling at a remarkable speed. The obesity and GLP-1 market is projected to grow from about $13.8 billion in 2024 to nearly $50 billion by 2030, roughly 18% per year. When including metabolic and cardiovascular implications, analysts estimate that the total GLP-1 market could exceed 100 billion dollars by the end of the decade.

Lilly dominates this space. Tirzepatide, sold as Mounjaro for diabetes and Zepbound for obesity, is now the world’s top-selling drug. Quarterly revenue recently grew 54% year over year to $17.6 billion.

The tirzepatide franchise generated $10.1 billion in the quarter, more than doubling from the prior year.

Mounjaro sales grew about 109%, while Zepbound grew about 185% year over year.

Management raised full-year guidance to more than $63 billion dollars and is expanding manufacturing capacity and clinical programs to support an even larger pipeline, including oral obesity drugs that could broaden the addressable market.

Risks include pricing pressure as policymakers focus on affordability, supply constraints that have already shaped patient access, and valuation sensitivity if growth slows or if the pipeline fails to match tirzepatide’s scale.

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III. Macro Themes Framing These Ideas for 2026

• Federal Reserve leadership and policy path. Jerome Powell’s term expires in May, and the market needs to parse how a new Chair appointed by President Trump might approach rate cuts, inflation targeting, and balance sheet policy.

• Consumer health in a sticky inflation world. The labor market remained firm in 2025, but retail data shows early signs of stress. If inflation runs persistently above target, household budgets could tighten and shift the earnings mix across sectors.

• Tech dominance and concentration risks. AI and cloud remain powerful forces, but valuations are stretched. Whether leadership broadens beyond mega-cap tech will determine how durable the market’s gains can be.

The Set-Up for 2026

Rate cuts, steady employment, and rising investment in AI and metabolic health are meaningful tailwinds. Yet leadership transitions at the Fed, consumer sensitivity to inflation, and rich valuations in technology suggest a thoughtful approach is wise.

Against that backdrop, GE Vernova, Broadcom, and Eli Lilly stand out as long-duration compounders anchored to structural growth trends rather than short-term luck. Their industries are expanding at double-digit rates, their operating metrics show accelerating momentum, and their strategic positions align with the most consequential themes of the coming decade.