AI stocks experienced a remarkable year: 3 of the S&P 500’s top 4 performers in 2025 were data storage companies, benefiting from massive AI-driven spending. Sandisk, $SNDK, topped the list with a 559% return, followed by Western Digital, $WDC, and Seagate, $STX, with returns of 284% and 225%, respectively. Meanwhile, Palantir ($PLTR) was the 9th-best-performing stock in the index, posting a 135% return last year. This marked the 3rd-consecutive year of triple-digit gains for the stock. AI-related stocks dominated equity performance in 2025.
5 COMPANIES BEST POSITIONED FOR THE PHYSICAL AI ECONOMY IN 2026
The robotics economy is starting to look like cloud computing did a decade ago, where the hard part is no longer the software or the computing power, because those are getting cheaper and better every year, but it is now physical deployment. As AI models improve at reasoning and the cost of running them continues to fall, robotics becomes a distribution problem. The companies that win will be the ones that control the data, the supply chains, the simulation tools used to train robots, and the places where those robots are deployed. That is where the real productivity gains come from, and those gains will reshape how work gets done over the next few decades. These are the companies best positioned to scale physical AI in the real world.
Oil prices closed out one of their toughest years in decades: WTI Crude Oil prices dropped -20% in 2025, posting the most significant loss since the 2020 pandemic. After recording a flat year in 2024, this marks the 3rd consecutive year with no gains. As a result, WTI Crude Oil prices closed the year below silver prices for the first time since the 1980s. Both the IEA and the US government said oil production exceeded consumption by ~2 million barrels per day in 2025, with the surplus set to widen further in 2026. Buckle up for another volatile year for oil prices.
The US Dollar experienced a historic decline in 2025: The US Dollar Index fell by -9% in 2025, marking its worst performance since 2017. This represents a sharp reversal from the +8% gain recorded in 2024. Excluding 2017, this was the weakest year for the currency since 2003. Since 2010, there have been only 5 years in which the US Dollar posted an annual decline. Meanwhile, hedge fund positioning on the US Dollar turned bearish as of the week ending December 16th, the first time since mid-October, according to CFTC data.
Tesla had a crappy week after tagging an all-time high. Tesla is expected to release their Q4 production and delivery results tomorrow morning (January 2nd) before 9:30 AM ET. Wall Street is expecting a delivery number of 422,800. Tesla will also release their Q4 energy storage deployment numbers. Should move the stock either way.
There is a record amount of money market funds on the sidelines, actually in the trillions, and it seems hedge funds are underexposed to stocks. All that is fuel for a potential rally, and rates will be going even lower in 2026. Always watch the Fed, because it matters most, but no guarantee how we start the year tomorrow. Hopefully, January is bullish, because if it is, it’s usually good for the rest of the year.
I hope you all had a great New Year’s Eve. Let’s buckle up because we have work to do. Let’s have a great year.