The U.S. stock market is once again drawing attention. Market momentum is being led by expectations of interest rate cuts that have persisted since last year and by the explosive growth of the AI industry. What stands out in particular is that this rally is not just a simple liquidity-driven upswing—it is an uptrend built on actual growth in corporate earnings. The S&P 500 is stabilizing in the high 6,000s, and major institutions are also raising expectations for additional rate cuts within this year.

Looking at the current situation in the U.S. stock market, a clear recovery trend is visible. Companies’ profit growth remains robust, and return on equity (ROE) is at its highest level in 30 years. That said, an imbalance rally centered on technology stocks is continuing, while other sectors are still lagging. With 95% of financial institutions expecting an average profit growth of 16% next year, top tech companies are projected to grow by 21%.

Still, what is driving the market is the AI and semiconductor sectors. Nvidia holds more than 80% of the data center market, and it has built not only a chip manufacturing business but also the CUDA ecosystem. Microsoft is moving forward with monetizing Copilot, and Google has also entered the AI search market in earnest with Gemini 2.0. Amazon is continuing to improve results through margin enhancement at AWS.

What’s interesting is the polarization within the healthcare sector. While Eli Lilly and Novo Nordisk are delivering strong performance with obesity treatments, traditional pharmaceutical companies saw their stock prices fall by 15–20% due to weak earnings. Clean energy is similar: although it is weak in the short term, medium- to long-term growth potential remains intact as the Federal Reserve’s easing stance and benefits from the Inflation Reduction Act continue.

There are key factors you should look at when investing in U.S. stocks. First is financial soundness. Companies like Apple and Microsoft, which hold cash-like assets of more than 600 billion dollars, do not get shaken even during an economic slowdown. Second is technological barriers to entry. Network effects like Nvidia’s CUDA make it difficult for competitors to catch up in the short term. Third is valuation. Tesla maintains a high PER, but this reflects a new business model that includes robotaxis and energy storage systems. Fourth is growth potential. AI, healthcare, and clean energy are being clearly narrowed into major global growth axes.

More specifically, notable stocks to watch include Nvidia, which is dominating the AI accelerator chip market, and Microsoft, where Copilot monetization and Azure AI customer lock-in are expected to play a role. Apple is aiming for high growth in service revenue through on-device AI. For Alphabet, Gemini 2.0 and the recovery of YouTube advertising are key, while for Amazon, the focus is on AWS margin improvement and retail automation. AMD is expanding its share in the AI accelerator market, and Meta is improving ad efficiency by further upgrading its AI recommendation engine. Tesla is growing its earnings base with FSD and energy storage. On the defensive side, Costco is showing steady growth in a phase where inflation is slowing, and UnitedHealth is expected to benefit from aging demographics and Optum’s data analytics growth.

As for investment strategy, diversified investing through ETFs is the most efficient approach. The global ETF market size has surpassed 17 trillion dollars, and capital inflows into large asset managers such as BlackRock and Vanguard are increasing rapidly. By using not only growth-sector ETFs like AI and semiconductors, but also dividend, healthcare, and defensive ETFs, you can reduce the risk of individual stocks.

Dollar-cost averaging (DCA) is especially suitable for markets with high volatility. According to JP Morgan Asset Management, if you invest consistently in the S&P 500 for 10 years, the probability of incurring losses is less than 5%. This well demonstrates the effectiveness of long-term investing in U.S. stocks. Risk management is also essential: you should rely on basics such as position size limits, setting stop-loss levels, sector diversification, and adjusting overextended sector weights through quarterly rebalancing.

In the end, the U.S. stock market is in the early stage of a gradual bull market. Structural growth based on earnings—centered on AI—is continuing, and if the Federal Reserve’s easing stance is maintained, risk-asset appetite is likely to strengthen gradually. In the short term, there may still be adjustment factors such as overheated tech stocks or geopolitical risks, but a solid corporate earnings structure is firmly supporting the market’s downside. The key for the next 5 years is long-term diversification and risk management. If you stick to steady investment principles—building an ETF portfolio, rebalancing regularly, and disciplined DCA—you can expect stable compounded returns even amid short-term volatility.