The Future Is Now, and It’s Expensive

DISCLAIMER: The following content is for informational and educational purposes only and does not constitute financial, investment, or legal advice. The opinions expressed herein are those of the author and Stock Region, not necessarily reflecting the views of any specific financial institution. Investing in the stock market involves risk, including the loss of principal. Please consult with a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results.

Date: Sunday, December 28, 2025
From: Stock Region Research
Read Time: 35 Minutes

The Big Picture: A World in Transition

Welcome back, investors. I hope you all had a wonderful Christmas. If you’re like me, you spent a good portion of it watching the markets—because let’s be honest, money doesn’t sleep, and neither does the geopolitical drama that fuels it.

We are closing out 2025 with a bang. The S&P 500 hitting all-time highs on Christmas Eve wasn’t merea gift; it was a statement. The resilience of this market is nothing short of miraculous given the backdrop. We have major geopolitical shifts in Ukraine and Venezuela, trade wars heating up with tariffs bringing in record revenue, and a tech sector that refuses to cool down, led by the absolute juggernaut that is Nvidia.

But beneath the surface of record highs, there is a complex undercurrent. We are seeing a “Total War” rhetoric from Iran, a Scotch whisky surplus (a tragedy, truly), and a U.S. economy that is booming on paper while leaving job seekers in the dust. The disconnect between GDP and employment is the story of the next decade, driven by the very AI we are investing in.

Today, we are going deep. We are going to dissect the geopolitical chess moves, the tech acquisitions reshaping the silicon landscape, and the commodities boom that is making silverbugs look like geniuses. Grab a coffee—or perhaps a discounted Scotch—and let’s get into it.

The Geopolitical Chessboard: Peace, War, and Robots

The world stage is messy right now. We have a mix of old-school diplomacy and sci-fi warfare happening simultaneously.

Ukraine: The Long Road to Peace

President Zelenskyy has drawn a line in the sand: no elections until a peace deal is signed. This is a bold move, effectively suspending the democratic process to ensure stability during wartime. It signals that we aren’t near the finish line yet, despite the chatter about peace talks.

However, the plot thickens with Former President Trump’s involvement. His recent announcement of a “productive call” with Putin ahead of a meeting with Zelenskyy at Mar-a-Lago suggests that the U.S. diplomatic machinery is running on overdrive, albeit through unconventional channels. Trump’s offer to address the Ukrainian parliament and his willingness to travel to Ukraine “if it would help save 25,000 lives a month” adds a layer of populist pressure to the negotiations.

The Market Angle:
Peace talks are generally bullish for European equities and bearish for defense stocks in the short term, but don’t dump your defense holdings yet. The reconstruction of Ukraine will be the biggest infrastructure project of the 21st century.

Stocks to Watch:

• Caterpillar Inc. (CAT): Essential for reconstruction.

• Fluor Corporation (FLR): Heavy construction and engineering.

• Lockheed Martin (LMT): Even with peace, deterrence requires inventory.

China’s Robocop Border Patrol

This is where things get futuristic. The deployment of UBTech’s Walker S2 humanoids at the Vietnam border is a massive validation of humanoid robotics in real-world scenarios. We are talking about machines that can swap their own batteries and patrol 24/7.

This $37 million deal is a drop in the bucket financially, but symbolically, it’s huge. It proves that the technology is ready for government contracts. If China is confident enough to put these on a border, industrial applications are not far behind.

Stocks to Watch:

• Tesla (TSLA): Optimus remains the direct competitor here. Any validation of the humanoid form factor is good for Tesla.

• UBTech (HKG: 9880): If you have access to Hong Kong markets, this is the direct play.

Venezuela and the Caribbean Theater

Tensions are boiling in our backyard. The deployment of special ops to Puerto Rico to pressure Maduro is a significant escalation. With Venezuela sitting on massive oil reserves, any instability there ripples through the energy markets. Trump’s aggressive stance here suggests we might see a return to heavy sanctions or even direct intervention scenarios, which keeps oil prices supported.

The Tech Titan: Nvidia’s $20 Billion Checkmate

Just when you thought Nvidia (NVDA) couldn’t get more dominant, they go and drop $20 billion on a strategic license with Groq.

Let’s break this down because it is the most critical tech news of the month. Groq has been the darling of the “anti-Nvidia” camp because of their LPU (Language Processing Unit) technology, which offers incredibly fast, deterministic inference. By licensing this tech and hiring key Groq talent, Nvidia is absorbing the competition’s best feature—low latency inference.

Why this matters:
Nvidia already owns the training market with their GPUs. But inference (running the AI models) is where the volume is. Groq’s tech allows Nvidia to offer a specialized solution for real-time applications where speed is everything. This secures their moat for another decade.

Nvidia Stats:

• Market Cap: ~$4.64 Trillion

• Growth Since 2020: Massive. From $144B to over $4T.

• Opinion: This stock is priced for perfection, but they keep delivering perfection. It’s hard to bet against Jensen Huang.

Growth Stocks to Watch in AI Hardware:

• Arm Holdings (ARM): As specialized chips grow, Arm’s architecture becomes more vital.

• Taiwan Semiconductor (TSM): They build it all. If Nvidia wins, TSM wins.

• Broadcom (AVGO): The silent giant in custom AI silicon.

Commodities Corner: The Silver Rocket Ship

If you ignored precious metals in 2025, you missed one of the easiest trades of the year.

Silver (SI=F) has gone parabolic. Hitting $82/oz is insane. We are talking about a +182% gain YTD. This is a supply crunch meeting industrial demand. Solar panels, EVs, and electronics all need silver.

Gold (GC=F) at $4,540/oz is equally impressive. The “safe-haven” narrative is strong, fueled by the geopolitical instability we discussed earlier. When Japan is approving record defense budgets and Iran is talking about “Total War,” people buy gold. It’s that simple.

Opinion:
Silver feels overextended here. A pullback is inevitable. However, the long-term structural deficit in silver supply means that any dip is likely a buying opportunity. We are in a commodity super-cycle.

Stocks to Watch:

• Pan American Silver (PAAS): High beta play on silver prices.

• Wheaton Precious Metals (WPM): A safer, royalty-based way to play the trend.

• Newmont Corporation (NEM): The gold standard (pun intended) for miners.

Economic Paradox: High Growth, No Jobs?

The U.S. economy grew at 4.3% in Q3. That is a booming number. Corporate profits are up $166 billion. But unemployment is ticking up to 4.6%, and hiring has stalled.

This is the “AI Disconnect” we have been warned about. Companies are becoming more efficient, using automation and AI to grow revenue without growing headcount. This is great for margins (and stock prices) but terrifying for the social fabric.

Elon Musk predicting double-digit GDP growth in 12-18 months sounds hyperbolic, but if AI productivity gains compound, it’s mathematically possible. The question is: who captures that value? Right now, it’s capital, not labor.

The Strategy:
Invest in the companies that are successfully replacing labor with capital (technology).

Stocks to Watch:

• Microsoft (MSFT): The leader in enterprise AI productivity.

• UiPath (PATH): Robotic Process Automation (RPA) is the front line of this trend.

• Salesforce (CRM): Integrating AI agents to replace customer service reps.

Consumer Goods & The Tariff Effect

The Scotch Surplus:
It breaks my heart to report that global Scotch whisky sales are down. Diageo cutting output is a sign that the consumer is tapped out. Higher living costs are forcing people to trade down from premium spirits.

The Tariff Windfall:
On the flip side, Trump’s tariffs have generated a record $236 billion. This is a complete reversal of the free-trade era. While it hurts importers, it’s generating massive revenue for the government, theoretically allowing for tax cuts elsewhere.

Opinion:
Avoid consumer staples that rely on premium pricing power in this environment. The consumer is hunting for value.

Stocks to Watch:

• Walmart (WMT): The ultimate beneficiary of a value-seeking consumer.

• Costco (COST): Membership model provides stability.

Stock Market Forecast: Into The Unknown

So, where do we go from here?

The Bull Case:

• AI productivity gains continue to drive margins higher.

• The Fed manages to cut rates as inflation stabilizes (outside of tariffs).

• Corporate buybacks remain strong.

The Bear Case:

• Geopolitical tensions explode (Iran, Venezuela, North Korea).

• The “disconnect” between jobs and GDP leads to consumer collapse.

• Valuations are stretched historically thin.

Forecast:
Expect volatility to increase in Q1 2026. The market is pricing in a perfect “soft landing” plus an AI boom. Any disappointment in earnings or a flare-up in conflict could trigger a 10-15% correction. However, the secular trend for AI and defense stocks remains upward.

Action Plan:

1. Trim the winners: Take some profits on Nvidia and other high-flyers. Rebalance.

2. Buy the fear: If defense stocks dip on peace talks, buy them. If tech dips on rate fears, buy quality.

3. Hold Hard Assets: Keep that gold and silver allocation.

Deep Dive: Sector Analysis and Ticker Watchlist

To help you navigate this complex landscape, I’ve broken down specific sectors with actionable insights. We are looking at why it matters for your portfolio in 2026.

A. Defense & Aerospace: The New Normal

With Israel investing $110 billion in arms manufacturing and Japan approving a record $782 billion budget, the global arms race is not slowing down. It is accelerating. The “peace dividend” of the 1990s is officially dead. Every major nation is re-arming.

• Rtx Corp (RTX): Formerly Raytheon. They make the missiles everyone is buying. Their backlog is robust, and they are critical to the U.S. defense industrial base.

• General Dynamics (GD): Tanks, submarines, and munitions. If the conflict in Ukraine or potential conflicts in Asia require ground or naval support, GD is the beneficiary.

• Palantir (PLTR): This is the bridge between tech and defense. Their software is running the modern battlefield. As warfare becomes more data-driven, Palantir becomes more essential.

B. Semiconductor Equipment: The Pick and Shovel Play

While Nvidia gets the glory, the companies that make the machines that make the chips are equally important. With the U.S. and China decoupling, duplicate supply chains are being built. That means more equipment sales.

• ASML Holding (ASML): They have a monopoly on EUV lithography machines. You cannot build a cutting-edge AI chip without them. Period.

• Applied Materials (AMAT): They provide the materials engineering solutions used to produce virtually every new chip and advanced display in the world.

• KLA Corp (KLAC): Process control and yield management. As chips get more complex, checking them for defects becomes harder and more expensive. KLAC owns this niche.

C. Energy: The Transition Hedge

The world is trying to go green, but geopolitical instability reminds us that oil and gas are strategic assets. With the U.S. deploying troops near Venezuela and tensions in the Middle East, energy security is paramount.

• Exxon Mobil (XOM): A cash flow machine. They are investing heavily in carbon capture and lithium as well, hedging their own future.

• Chevron (CVX): Strong balance sheet and a dividend aristocrat. A safe place to park cash if the tech sector corrects.

• Cameco (CCJ): The premier uranium play. Nuclear energy is seeing a renaissance as AI data centers demand massive amounts of baseload power.

D. Healthcare: The Sleeper Sector

While tech sucks up all the oxygen, healthcare innovation is quietly compounding. The West Virginia ruling on food dyes and the focus on health outcomes suggest a shift toward preventative care and stricter regulation on consumables.

• Eli Lilly (LLY): The leader in GLP-1 weight loss drugs. This trend is not over; it’s just beginning. Obesity is a global epidemic, and they have the cure.

• Novo Nordisk (NVO): The main competitor to Lilly. Owning both is a smart “duopoly” play.

• Intuitive Surgical (ISRG): Robotic surgery. As hospitals look for efficiency and better outcomes, robotic assistance becomes standard.

The Human Element: A Personal Note

I want to take a moment to address the anxiety many of you might be feeling. Reading about “Total War,” nuclear posturing, and AI replacing jobs is heavy stuff. It’s easy to get lost in the numbers and forget the human cost.

When we see stats like “record drop in murders” in the U.S., we should celebrate that. It means families are safer. When we see peace talks, even if fragile, we should hope for their success. The market is a reflection of human activity, both the creative and the destructive.

As investors, our job is to be objective observers. We must detach our emotions from our capital. You can hate the idea of war but still recognize that Lockheed Martin is a buy. You can fear AI taking your job but still invest in Microsoft to hedge your own career risk. This is the duality of the modern investor. We hedge our lives with our portfolios.

January 2026 Watchlist:

1. CES (Consumer Electronics Show): Watch for humanoid robots and AI agents. This will set the narrative for consumer tech for the year.

2. Q4 Earnings Season: Will the banks confirm the economic strength? Will retailers confirm the consumer weakness?

3. Inauguration Day / Policy Shifts: Watch for Executive Orders regarding tariffs and energy policy.

2025 was a year of resilience. The market climbed a wall of worry. 2026 looks like a year of transformation. The technologies we have been hyping (AI, robotics) are hitting the ground. The geopolitical alliances are shifting. The monetary landscape is changing with tariffs and deficits.

Stay nimble. Stay informed. And most importantly, stay invested. History shows that time in the market beats timing the market, even when the world feels like it’s on fire.

See you in the New Year. Let’s make it a profitable one.

DISCLAIMER: The content provided in this newsletter is for informational purposes only and should not be construed as financial advice, an offer to sell, or a solicitation of an offer to buy any securities. The views and opinions expressed are those of the authors and do not necessarily reflect the official policy or position of Stock Region. Investing involves significant risk, including the potential loss of the entire investment. Always conduct your own due diligence and consult with a professional financial advisor before making any investment decisions. Stock Region and its affiliates may hold positions in the securities mentioned.

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