As fireworks greeted the arrival of 2026, I spent the final days of the year doing what every investor should do: taking stock. And I must say that 2025 was a year we will not easily forget, a year in which the markets surprised us once again, rewarding those who were able to read trends and punishing those who clung to outdated strategies.

The S&P 500 closed the year with a gain of 16.4%, the Nasdaq did even better with a 20% gain, while the Dow Jones stagnated at a still respectable 13%. This marks the third consecutive year of double-digit returns, an event so rare that it has only happened six times since 1940. But as always happens in financial markets, averages hide very different stories.

The Overall Winners of 2025

Alphabet (Google): The Rebirth of the Mountain View Colossus

If I had to choose just one stock to represent 2025, it would be Alphabet. With a 66% return in the year just ended, Google proved to all skeptics that rumors of the death of its business model were decidedly premature. I remember well how sentiment at the beginning of the year was anything but positive: ChatGPT seemed to threaten the very existence of traditional search, and many analysts predicted a slow decline for the Mountain View giant.

The reality turned out to be completely different. Google not only responded to the challenge of generative AI, but fully embraced it. Gemini, its proprietary AI model, recorded 300% year-over-year growth, far outpacing competitor GPT. The integration of AI into search results, rather than cannibalizing its core business, increased user engagement.

But the real surprise came from the cloud. Google Cloud continued to gain market share with double-digit growth, increasingly becoming a key pillar of the group's revenue. YouTube, meanwhile, continued its inexorable march into traditional TV territory, consolidating its position as the dominant video platform globally.

Then there's the issue of Waymo, the robotaxi service that continues to expand while competitors struggle to find a scalable solution. The latest positive catalyst came at the end of the year, when a federal judge ruled that Google would not be forced to sell Chrome, removing a significant regulatory uncertainty that had weighed on the stock.

Nvidia: The AI Domination Continues

Nvidia closed 2025 with a 42% increase, a result that in any other context would be considered extraordinary but which, after the 171% increase in 2024 and the 239% increase in 2023, may seem almost modest. The truth is that the growth of the previous years was simply unsustainable, and a normalization was inevitable.

What really matters is that Nvidia remains the dominant company in today's most important sector: artificial intelligence infrastructure. Revenue for the fiscal third quarter reached $57 billion, up 62% year over year, driven by the seemingly insatiable demand for its AI chips. The data center division alone generated over $51 billion.

The year wasn't without its share price turbulence. Export restrictions to China created uncertainty, and the DeepSeek scandal in late January temporarily shook the stock. But Nvidia demonstrated remarkable resilience, quickly recovering from its April lows, when the stock fell below $90.

Microsoft: Transforming AI into a Toolbox

With a 16% gain for the year, Microsoft delivered solid returns to shareholders, though not as spectacular as those of other members of the Magnificent 7. But looking only at the share price would miss the bigger picture of a historic corporate transformation.

Satya Nadella has completed Microsoft's repositioning from a mere software vendor to what we might call the "toolbox of the AI era." Every company looking to implement AI solutions inevitably turns to Azure, and this strategic positioning is driving cloud growth that continues to be impressive.

The partnership with OpenAI, despite occasional tensions, remains one of the most valuable assets in the tech landscape. And products like Copilot are redefining the way millions of professionals work with Office tools every day.

The Stocks That Disappointed

Nike: Fourth Consecutive Year of Decline

When an iconic company like Nike loses value for four consecutive years, something fundamental has broken. The stock fell another 22% in 2025, bringing total losses from its November 2021 peak to approximately 65%. For someone like me who grew up seeing Nike as synonymous with excellence in sports marketing, it was a painful sight.

The problems are multiple and interconnected. The direct-to-consumer strategy, which seemed brilliant during the pandemic, has proven to be a double-edged sword. Severing ties with traditional retailers deprived Nike of a key distribution channel, while direct commerce has failed to fully compensate for lost sales.

But the most serious problem is innovation, or rather, its absence. While competitors like Hoka and On Running have won the hearts of runners with genuinely innovative products, Nike has continued to re-release variations on outdated themes. The Jordan franchise, once a golden goose, has shown signs of fatigue after years of excessive releases.

Intel: The Former Champion Seeks Rebirth

Intel's story in 2025 is perhaps the most complex to tell. On the one hand, the stock has posted a surprising positive performance, rebounding about 90% from the lows reached at the end of 2024. On the other, the company remains a pale shadow of the giant that once dominated the semiconductor industry.

2024 had been catastrophic: the stock had lost over 60%, Pat Gelsinger had been forced to resign, and Intel had been removed from the Dow Jones after 25 years. 2025 brought stabilization, aided by the US government's investment through the CHIPS Act and, surprisingly, a $5 billion investment from Nvidia.

But structural challenges remain enormous. Intel lags behind TSMC in its manufacturing process, struggles to compete in the AI market where Nvidia dominates unchallenged, and its core PC processor business is under constant pressure from AMD and Apple's proprietary chips.

What 2025 Teaches Us

Looking back on the past year, some key lessons emerge that every investor would be wise to take with them into 2026.

The first is that artificial intelligence is no longer a speculative narrative, but a reality that is concretely transforming corporate balance sheets. Companies that have successfully monetized AI have seen their stocks soar, while those left on the sidelines of this revolution have suffered.

The second lesson concerns the importance of management. Companies like Microsoft and Alphabet have demonstrated that visionary leadership can make the difference between riding the wave of change and being overwhelmed by it. In contrast, the problems at Nike and Intel are largely attributable to strategic errors at the top.

The third consideration concerns valuations. In a market that has soared for three consecutive years, it's becoming increasingly important to distinguish between companies that deserve high multiples thanks to earnings growth and those that are simply overvalued.

Experts' Predictions for 2026

With the new year just beginning, Wall Street's most followed analysts have already shared their views on 2026. And the consensus, albeit with due nuances, remains constructive.

Tom Lee (Fundstrat): S&P 500 at 7,700

Tom Lee, whose track record in recent years has been remarkable, sees the S&P 500 reaching 7,700 points by the end of 2026, a gain of about 12% from current levels. His thesis is based on three pillars: the end of the Fed's quantitative tightening, more accommodative monetary policy with a new Federal Reserve chairman, and continued support from the AI revolution.

Lee cautions, however, that the path will not be linear. He expects significant volatility in the first half of the year, with possible corrections that could resemble bear markets, before a strong recovery in the second half once the uncertainties have been resolved.

Dan Ives (Wedbush): Tech up 20-25%

Dan Ives, Wall Street's most bullish tech analyst, isn't disappointing. He predicts tech stocks will gain between 20% and 25% in 2026, driven by the second and third derivatives of the AI revolution.

His five favorite stocks for the new year are Microsoft, Tesla, Palantir, CrowdStrike, and Apple. The underlying thesis is simple: for every dollar spent on Nvidia chips, there's an 8-10x multiplier in the rest of the tech ecosystem. That's where the most interesting opportunities for 2026 lie.

How to Position Yourself in 2026

Based on all of the above, how should an Italian investor interested in American markets position himself?

For short-term investors, the expected volatility in the first half of the year could offer interesting trading opportunities. Sectors to watch are tech (obviously), energy, and financials, which could benefit from a rotation from growth to value if the AI narrative were to temporarily lose momentum.

For medium-term investors, the most prudent strategy seems to be to maintain significant exposure to AI leaders, but with a close eye on valuations. Google, still trading at reasonable multiples relative to expected growth, may be a more sensible choice than already perfectly priced stocks like Palantir.

For those thinking long-term , this might be the time to start building positions in value stocks that have been penalized by the market. Nike, despite all its problems, remains a global brand with enormous pricing power. If a turnaround were to materialize in the next two to three years, patient investors could be handsomely rewarded.

Final Considerations

2025 reminded us once again that financial markets reward those who can adapt to change. Artificial intelligence is no longer the future, it's the present, and companies that have embraced it are reaping the rewards. At the same time, legacy brands that failed to innovate are paying a heavy price.

Looking ahead to 2026, the optimism of respected analysts appears justified, albeit tempered by the knowledge that the path will be anything but linear. The fundamentals of leading companies remain solid, earnings growth continues, and the gradually declining interest rate environment should support valuations.

As always in markets, the key will be to maintain discipline, diversify adequately, and avoid being overwhelmed by either euphoria during bull markets or panic during inevitable corrections. 2025 rewarded those who remained invested despite the turbulence. 2026 will likely do the same.

Happy New Year and happy investing to everyone.