Reflecting on the 2025 AI Stock Surge: Key Themes to Watch in 2026

[Ben Graham]

If 2024 was the year of "higher for longer," 2025 will be remembered as the year of the "Debasement Trade."

It was a year where the playbook wasn’t just rewritten—it was thrown out the window. Sudden, aggressive inflows into non-governmental assets defined the price action, as investors sought refuge in cryptocurrencies, precious metals, and, most aggressively, equities.

But the path to the current all-time highs was anything but a straight line. The year began with a brutal reality check—a nearly 30% correction across most major indexes in Q1 that flushed out the leverage of late 2024.

However, as geopolitical turmoil abated in the second quarter, the "fear trade" morphed into a "scarcity trade." Capital flooded back into the market, driving a relentless run to record highs.

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US Major Stock Indexes in 2025 (Weekly Charts) – December 29, 2025. Source: TradingView

While the Nasdaq outperformed its peers for the first three quarters, the final months of 2025 have seen a broadening of the rally. The Dow Jones Industrial Average and defensive sectors have played catch-up, signaling a mature, albeit overheated, bull market.

Here is how the key themes of 2025 played out, and what they tell us about the road ahead in 2026.

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2025 Sector Performance – December 29, 2025. Source: TradingView

The Semiconductor Folly: Chasing the Peak

The AI trend, which began its ascent from the 2023 market bottom, accelerated into a frenzy in 2025. Semiconductors remained the undisputed kings of the market, though cracks have begun to form in the armor.

Nvidia held its high standards, continuing to defy gravity for much of the year. While the stock has seen a mild sell-off since October as profit-taking set in, it remains the backbone of the AI infrastructure build-out, finishing the year with still-staggering gains of nearly 85%.

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Nvidia in 2025 Daily Chart, December 29, 2025. Source: TradingView

The most dramatic story of the year, however, belonged to Oracle. The legacy tech giant saw a vertical, rollercoaster spike to all-time highs in Q3, driven by aggressive cloud expansion announcements. For a brief, shining moment, the surge made Larry Ellison the richest man in the world. But the euphoria was short-lived. A sober assessment of capital expenditure costs versus actual revenue realization led to a violent unwind, with the stock crashing 50% from its peak—a stark reminder of the volatility inherent in parabolic moves.

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Oracle in 2025 Daily Chart, December 29, 2025. Source: TradingView

Despite rising tensions in the Taiwan Strait, TSMC (Taiwan Semiconductor) continued to grab massive attention. Investors seemingly ignored the geopolitical risk premium, choosing instead to focus on the company's monopoly on advanced packaging. Similarly, AMD saw renewed demand in "proxy trades," as money managers sought alternatives to the crowded Nvidia trade.

The Metal Stocks Spikes

Perhaps the most surprising "AI trade" of 2025 wasn’t a chipmaker, but a gold miner. The metals and mining sector, often neglected in favor of high-growth tech, became the darling of the debasement trade – Today's flows are actually seeing a strong retracement lower in precious metals (Platinum down 13%, Gold down 4%), more on this coming soon on Marketpulse.

As fiat currency concerns mounted, investors realized that the hardware powering the AI revolution—copper, silver, and gold—was in critically short supply. The result was a sector-wide explosion, with mining stocks growing over 70% on the year.

• The Standouts: Giants like Rio Tinto and Barrick Gold saw inflows usually reserved for software companies.

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Barrick Gold (ABX) Daily Chart – December 29, 2025. Source: TradingView

• The Silver Surge: Silver, essential for both industrial electronics and monetary hedging, lit a fire under names like Wheaton Precious Metals and First Majestic Silver (AG). First Majestic, in particular, became a retail favorite, riding the dual wave of meme-stock energy and genuine commodity scarcity.

This wasn’t just a commodity super-cycle; it was a repricing of tangible assets in a digitized world.

Read More:

• The 2025 Metal Frenzy: A Year-End Wrap-Up and 2026 Outlook
• 2026 FX Outlook: Improved global growth boosts weaker US dollar; EUR, AUD, and JPY top picks
• 2026 Stock Indices Outlook: Dow Jones, Nikkei 225, Hang Seng poised to outperform

Tech Sector Rollercoasters

Not all "Magnificent" stocks were demanded equally in 2025.

Communication Services staged a massive comeback. After a quiet 2024, Alphabet (Google) and Meta Platforms aggressively reclaimed their crowns. Their pivot to integrating AI into ad-spend efficiency rather than just consumer chatbots paid dividends, driving their stocks back to record highs.

Cloud & Security: The enterprise layer of AI also flourished. IBM, often written off as a dinosaur, found new life in hybrid cloud architecture, while CrowdStrike capitalized on the increasing need for AI-driven cybersecurity.

The Amazon Problem: The glaring exception was Amazon. The retail and cloud giant struggled harshly throughout 2025. Plagued by disappointing sales figures and stiff competition in the AWS space from Azure and Oracle, the stock is up a measly 4% on the year—a massive underperformance relative to the Nasdaq.

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AMZN, Google and Crowdstrike (Weekly Charts) – December 29, 2025. Source: TradingView

What to look for in 2026

As we look toward 2026, the question on every trader's mind is simple: Can this last?

The S&P 500 is currently trading at price-to-earnings (P/E) multiples that are testing historical limits. The market is priced for perfection, assuming that AI implementation will lead to immediate, margin-expanding productivity.

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S&P 500 P/E Ratios – Courtesy of FirstTuesdayJournal

Key Themes to Watch:

• From Chips to Energy The most actionable trade for 2026 may be a transition of flows from chip production to energy consumption. The high-consumption AI systems and data centers being built today require massive amounts of power.
  • The Play: Keep a close eye on Utilities, Nuclear Energy, and Grid Efficiency firms. If 2025 was about buying the chips, 2026 will be about buying the electricity to run them.

• The Profitability Test Earnings season will take on a new level of scrutiny. Investors will no longer be satisfied with "AI roadmaps." They will demand to see if AI integrations are turning into profitable additions to the bottom line. If margins don't expand to justify these valuations, the correction could be swift.

• The Macro Backdrop The U.S. economy remains in a delicate balance. The impact of new tariffs on inflation will be the primary data point to watch. Will the Federal Reserve be able to cut rates further to support growth, or will sticky inflation force them to hold rates at these restrictive levels?

• Winner or Bubble? Finally, the most challenging theme is existential. Is AI a winner that fundamentally alters the global economy, or is it a bubble echoing the dot-com era? The divergence between the "Oracle crash" and the "Nvidia resilience" suggests the market is starting to separate the wheat from the chaff.

In 2026, selectivity will be everything. The rising tide lifted all boats in 2025, but in 2026, you’ll need to make sure your ship has a hull.

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