by Bryan Perry
December 30, 2025
As 2025 comes to a close, all the major indexes are at, or near, all-time highs. Even the Russell 2000 enjoyed a big catch-up move when it became clear that a rate cut was imminent, along with a dovish shift in Fed monetary policy. As of last Friday, the year-to-date returns for the averages are as follows:

The AI boom has been a big contributor to the latest upbeat reading of third-quarter GDP, coming in at 4.3%, with a robust outlook for growth for AI Capex spending to come. Forecasts for global AI capital expenditure (Capex) in 2026 reflect a “doubling-down” by major technology firms, with total spending now projected to exceed half a trillion-dollars. (Wall Street analysts have repeatedly revised these numbers upward as the scale of data-center and infrastructure needs become clearer).

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
According to Goldman Sachs Insight Article December 18, 2025, Goldman Sachs analysts project global AI-related Capex will reach between $527-billion and $571-billion in 2026. The “Big Five” will provide a massive portion of this, as $450-billion is expected to come from just five-companies: Microsoft, Alphabet, Amazon, Meta, and Oracle.
While the year-over-year growth rate is expected to slow from the soaring 60%+ levels in 2024–2025, it is still forecast to rise a robust 25% to 36% for 2026. As good as that sounds, there is a clear rotation underway, as this is one area where investors and talking heads are more cautious at year-end 2025.
Goldman Sachs explains this divergence:
“The past few months have seen the stock prices of AI hyper-scalers diverge: Investors have rotated away from AI infrastructure companies where operating earnings growth is under pressure and where Capex is being funded via debt. At the same time, investors have rewarded companies demonstrating a clear link between Capex and revenues, such as some of the world’s biggest cloud platform operators.”

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
Earlier this year, the biggest AI stocks rose as a group on the continued strength of AI investment spending. But since June, the average stock price correlation across the large public AI hyper-scalers has declined from 80% to just 20%. Goldman says some of the dispersion has been driven by the degree of investor confidence that AI investments are generating revenue benefits.
This is the great payoff – when companies monetize their AI investments. More evidence of future Capex trends and return on investment (ROI) will emerge during the fourth-quarter reporting season that begins in mid-January. But I think the market is already looking further out. The annual growth rate of AI Capex is projected to undergo a significant “step down” after 2026. Many analysts, including those from SEMI and Deloitte, point to 2027 as a critical inflection point or “reality check” for the sector: If the transition to “Agentic AI” – systems capable of autonomous action – fails to deliver productivity gains that justify the trillions in capital expenditure, the industry could face a sharp contraction (source: eetimes).
There is already a notable shift underway: Gains in 2025 were concentrated in AI infrastructure, which includes semiconductors, data center operators, technology hardware providers, and power companies. Now, companies across multiple industries realizing AI-embedded revenue growth are seeing bullish fund flows. Those termed “AI Platform” stocks (including providers of database and development tools) are currently outperforming and are forecast to continue to do so as corporate AI adoption increases.
This is the “applications and efficiency” phase of the AI trade. The biggest shift forecasted for 2026 is the rise of AI Agents – systems that don’t just answer questions but execute work. Instead of selling a subscription, companies will sell “task completion.” Analysts estimate this could add $1-trillion to the global economy by 2030 as agents take over IT remediation, supply chain rerouting and customer service.
While there is clearly a highly vocal debate about the rate of the future growth for the AI infrastructure layer, there is rising analyst confidence surrounding margin expansion and earnings prospects from AI-derived productivity gains among companies in all sectors that will contribute to strong growth in 2026.
The AI trade looks very sustainable, but the discussion over the vulnerabilities of OpenAI over their leverage, concentrated dependency, burn rate, circular financing concerns, most Wall Street strategists warn of a potential “AI air-pocket” in 2026. That’s something to think about and closely monitor.
Navellier & Associates; own Alphabet Inc. Class A (GOOGL), Amazon.com, Inc. (AMZN), Microsoft Corporation (MSFT), Meta (META), and Oracle Corporation (ORCL), in managed accounts. Bryan Perry owns Amazon.com, Inc. (AMZN), and Microsoft Corporation (MSFT), in a personal account and he does not personally own Alphabet Inc. Class A (GOOGL), Meta (META), and Oracle Corporation (ORCL).
All content above represents the opinion of Bryan Perry of Navellier & Associates, Inc.
Also In This Issue
A Look Ahead by Louis Navellier
What Could Go Wrong in 2026?
Income Mail by Bryan Perry
A Year-End Look Under the Market’s AI Hood
Growth Mail by Gary Alexander
U.S. GDP is Now Flirting With 5% Growth Rates in 2026
Global Mail by Ivan Martchev
Knocking on the Door of S&P 7000
Sector Spotlight by Jason Bodner
Santa Claus Arrives – Better Late Than Never
View Full Archive
Read Past Issues Here

Bryan Perry
SENIOR DIRECTOR
Bryan Perry is a Senior Director with Navellier Private Client Group, advising and facilitating high net worth investors in the pursuit of their financial goals.
Bryan’s financial services career spanning the past three decades includes over 20-years of wealth management experience with Wall Street firms that include Bear Stearns, Lehman Brothers and Paine Webber, working with both retail and institutional clients. Bryan earned a B.A. in Political Science from Virginia Polytechnic Institute & State University and currently holds a Series 65 license. All content of “Income Mail” represents the opinion of Bryan Perry
Important Disclosures:
Although information in these reports has been obtained from and is based upon sources that Navellier believes to be reliable, Navellier does not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute Navellier’s judgment as of the date the report was created and are subject to change without notice. These reports are for informational purposes only and are not a solicitation for the purchase or sale of a security. Any decision to purchase securities mentioned in these reports must take into account existing public information on such securities or any registered prospectus.To the extent permitted by law, neither Navellier & Associates, Inc., nor any of its affiliates, agents, or service providers assumes any liability or responsibility nor owes any duty of care for any consequences of any person acting or refraining to act in reliance on the information contained in this communication or for any decision based on it.
Past performance is no indication of future results. Investment in securities involves significant risk and has the potential for partial or complete loss of funds invested. It should not be assumed that any securities recommendations made by Navellier. in the future will be profitable or equal the performance of securities made in this report. Dividend payments are not guaranteed. The amount of a dividend payment, if any, can vary over time and issuers may reduce dividends paid on securities in the event of a recession or adverse event affecting a specific industry or issuer.
None of the stock information, data, and company information presented herein constitutes a recommendation by Navellier or a solicitation to buy or sell any securities. Any specific securities identified and described do not represent all of the securities purchased, sold, or recommended for advisory clients. The holdings identified do not represent all of the securities purchased, sold, or recommended for advisory clients and the reader should not assume that investments in the securities identified and discussed were or will be profitable.
Information presented is general information that does not take into account your individual circumstances, financial situation, or needs, nor does it present a personalized recommendation to you. Individual stocks presented may not be suitable for every investor. Investment in securities involves significant risk and has the potential for partial or complete loss of funds invested. Investment in fixed income securities has the potential for the investment return and principal value of an investment to fluctuate so that an investor’s holdings, when redeemed, may be worth less than their original cost.
One cannot invest directly in an index. Index is unmanaged and index performance does not reflect deduction of fees, expenses, or taxes. Presentation of Index data does not reflect a belief by Navellier that any stock index constitutes an investment alternative to any Navellier equity strategy or is necessarily comparable to such strategies. Among the most important differences between the Indices and Navellier strategies are that the Navellier equity strategies may (1) incur material management fees, (2) concentrate its investments in relatively few stocks, industries, or sectors, (3) have significantly greater trading activity and related costs, and (4) be significantly more or less volatile than the Indices.
ETF Risk: We may invest in exchange traded funds (“ETFs”) and some of our investment strategies are generally fully invested in ETFs. Like traditional mutual funds, ETFs charge asset-based fees, but they generally do not charge initial sales charges or redemption fees and investors typically pay only customary brokerage fees to buy and sell ETF shares. The fees and costs charged by ETFs held in client accounts will not be deducted from the compensation the client pays Navellier. ETF prices can fluctuate up or down, and a client account could lose money investing in an ETF if the prices of the securities owned by the ETF go down. ETFs are subject to additional risks:
- ETF shares may trade above or below their net asset value;
- An active trading market for an ETF’s shares may not develop or be maintained;
- The value of an ETF may be more volatile than the underlying portfolio of securities the ETF is designed to track;
- The cost of owning shares of the ETF may exceed those a client would incur by directly investing in the underlying securities; and
- Trading of an ETF’s shares may be halted if the listing exchange’s officials deem it appropriate, the shares are delisted from the exchange, or the activation of market-wide “circuit breakers” (which are tied to large decreases in stock prices) halts stock trading generally.
Grader Disclosures: Investment in equity strategies involves substantial risk and has the potential for partial or complete loss of funds invested. The sample portfolio and any accompanying charts are for informational purposes only and are not to be construed as a solicitation to buy or sell any financial instrument and should not be relied upon as the sole factor in an investment making decision. As a matter of normal and important disclosures to you, as a potential investor, please consider the following: The performance presented is not based on any actual securities trading, portfolio, or accounts, and the reported performance of the A, B, C, D, and F portfolios (collectively the “model portfolios”) should be considered mere “paper” or pro forma performance results based on Navellier’s research.
Investors evaluating any of Navellier & Associates, Inc.’s, (or its affiliates’) Investment Products must not use any information presented here, including the performance figures of the model portfolios, in their evaluation of any Navellier Investment Products. Navellier Investment Products include the firm’s mutual funds and managed accounts. The model portfolios, charts, and other information presented do not represent actual funded trades and are not actual funded portfolios. There are material differences between Navellier Investment Products’ portfolios and the model portfolios, research, and performance figures presented here. The model portfolios and the research results (1) may contain stocks or ETFs that are illiquid and difficult to trade; (2) may contain stock or ETF holdings materially different from actual funded Navellier Investment Product portfolios; (3) include the reinvestment of all dividends and other earnings, estimated trading costs, commissions, or management fees; and, (4) may not reflect prices obtained in an actual funded Navellier Investment Product portfolio. For these and other reasons, the reported performances of model portfolios do not reflect the performance results of Navellier’s actually funded and traded Investment Products. In most cases, Navellier’s Investment Products have materially lower performance results than the performances of the model portfolios presented.
This report contains statements that are, or may be considered to be, forward-looking statements. All statements that are not historical facts, including statements about our beliefs or expectations, are “forward-looking statements” within the meaning of The U.S. Private Securities Litigation Reform Act of 1995. These statements may be identified by such forward-looking terminology as “expect,” “estimate,” “plan,” “intend,” “believe,” “anticipate,” “may,” “will,” “should,” “could,” “continue,” “project,” or similar statements or variations of such terms. Our forward-looking statements are based on a series of expectations, assumptions, and projections, are not guarantees of future results or performance, and involve substantial risks and uncertainty as described in Form ADV Part 2A of our filing with the Securities and Exchange Commission (SEC), which is available at www.adviserinfo.sec.gov or by requesting a copy by emailing info@navellier.com. All of our forward-looking statements are as of the date of this report only. We can give no assurance that such expectations or forward-looking statements will prove to be correct. Actual results may differ materially. You are urged to carefully consider all such factors.
FEDERAL TAX ADVICE DISCLAIMER: As required by U.S. Treasury Regulations, you are informed that, to the extent this presentation includes any federal tax advice, the presentation is not written by Navellier to be used, and cannot be used, for the purpose of avoiding federal tax penalties. Navellier does not advise on any income tax requirements or issues. Use of any information presented by Navellier is for general information only and does not represent tax advice either express or implied. You are encouraged to seek professional tax advice for income tax questions and assistance.
IMPORTANT NEWSLETTER DISCLOSURE:The hypothetical performance results for investment newsletters that are authored or edited by Louis Navellier, including Louis Navellier’s Growth Investor, Louis Navellier’s Breakthrough Stocks, Louis Navellier’s Accelerated Profits, and Louis Navellier’s Platinum Club, are not based on any actual securities trading, portfolio, or accounts, and the newsletters’ reported hypothetical performances should be considered mere “paper” or proforma hypothetical performance results and are not actual performance of real world trades. Navellier & Associates, Inc. does not have any relation to or affiliation with the owner of these newsletters. There are material differences between Navellier Investment Products’ portfolios and the InvestorPlace Media, LLC newsletter portfolios authored by Louis Navellier. The InvestorPlace Media, LLC newsletters contain hypothetical performance that do not include transaction costs, advisory fees, or other fees a client might incur if actual investments and trades were being made by an investor. As a result, newsletter performance should not be used to evaluate Navellier Investment services which are separate and different from the newsletters. The owner of the newsletters is InvestorPlace Media, LLC and any questions concerning the newsletters, including any newsletter advertising or hypothetical Newsletter performance claims, (which are calculated solely by Investor Place Media and not Navellier) should be referred to InvestorPlace Media, LLC at (800) 718-8289.
Please note that Navellier & Associates and the Navellier Private Client Group are managed completely independent of the newsletters owned and published by InvestorPlace Media, LLC and written and edited by Louis Navellier, and investment performance of the newsletters should in no way be considered indicative of potential future investment performance for any Navellier & Associates separately managed account portfolio. Potential investors should consult with their financial advisor before investing in any Navellier Investment Product.
Navellier claims compliance with Global Investment Performance Standards (GIPS). To receive a complete list and descriptions of Navellier’s composites and/or a presentation that adheres to the GIPS standards, please contact Navellier or click here. It should not be assumed that any securities recommendations made by Navellier & Associates, Inc. in the future will be profitable or equal the performance of securities made in this report.
FactSet Disclosure: Navellier does not independently calculate the statistical information included in the attached report. The calculation and the information are provided by FactSet, a company not related to Navellier. Although information contained in the report has been obtained from FactSet and is based on sources Navellier believes to be reliable, Navellier does not guarantee its accuracy, and it may be incomplete or condensed. The report and the related FactSet sourced information are provided on an “as is” basis. The user assumes the entire risk of any use made of this information. Investors should consider the report as only a single factor in making their investment decision. The report is for informational purposes only and is not intended as an offer or solicitation for the purchase or sale of a security. FactSet sourced information is the exclusive property of FactSet. Without prior written permission of FactSet, this information may not be reproduced, disseminated or used to create any financial products. All indices are unmanaged and performance of the indices include reinvestment of dividends and interest income, unless otherwise noted, are not illustrative of any particular investment and an investment cannot be made in any index. Past performance is no guarantee of future results.