Looking back at the U.S. stock market last year, there was a really interesting trend. An unbalanced rally centered around AI and semiconductors led the entire market, but the key point is that this was not just a liquidity-driven market, but one based on earnings growth.

As of the end of last year, the S&P 500 was trading in the high 6,000s and rose over 12% annually, with AI chip manufacturers like NVIDIA leading the market. With data center sales accounting for over 90% of total revenue, a real structural change is happening. Microsoft and Google are also releasing their own AI chips, intensifying cloud competition.

What should be the first thing to look at when considering foreign stock recommendations? In my experience, financial soundness is the top priority. Companies with sufficient cash assets and stable debt structures tend to withstand market volatility. Apple and Microsoft each hold over $600 billion in cash, and these companies can maintain dividends and share buybacks even during downturns.

Next is competitiveness and barriers to entry. NVIDIA controls over 80% of the AI computing GPU market, creating network effects through the CUDA ecosystem and software integration beyond simple chip manufacturing. This gives them a structural advantage that competitors find difficult to catch up with in the short term.

Valuation is also important, but a high PER doesn’t always mean overheating. Tesla still maintains a PER over 60, but this reflects expectations for new business models like robotaxis and energy storage systems. Conversely, stocks relying solely on short-term themes with high PERs can quickly adjust if profit momentum wanes.

Looking at notable foreign stock recommendations from last year, big tech centered on AI and cloud remained strong. Microsoft is monetizing Copilot, and Azure AI customer lock-in effects are increasing. Apple’s on-device AI is driving high growth in service revenue, and Alphabet is expanding earnings with Gemini 2.0 and YouTube ad recovery.

An interesting aspect is the polarization in the healthcare sector. Eli Lilly and Novo Nordisk posted excellent results with obesity treatments, while traditional pharma like Pfizer saw stock prices drop 15-20% due to revenue slowdown. This illustrates how rapidly structural changes are occurring within industries.

The clean energy sector is also fascinating. Although it showed weakness in the short term due to oversupply concerns, the long-term growth potential remains intact as the Fed’s easing stance and tax benefits from the Inflation Reduction Act persist. First Solar and NextEra Energy saw their stock prices adjust due to increased funding costs, but as costs stabilize and energy storage costs decline, there’s room for recovery.

When recommending foreign stocks, practical strategies are also crucial. Diversification through ETFs is the most efficient. As the global ETF market exceeded $17 trillion in 2025, the importance of long-term diversified investing has been reaffirmed. Using sector ETFs focused on AI and semiconductors, along with dividend, healthcare, and defensive ETFs, can reduce individual stock risks.

Dollar-cost averaging (DCA) is also highly effective. Investing a fixed amount regularly lowers the average purchase price and provides psychological stability in volatile markets. JP Morgan Asset Management found that a consistent 10-year investment in the S&P 500 has less than a 5% chance of loss.

Risk management is fundamental to all investment strategies. Limiting position sizes, setting stop-losses, diversifying across sectors, and reducing positions during FOMC, CPI, or earnings weeks are essential. Quarterly rebalancing to adjust overheated sector weights and balance gains and losses is also important.

Ultimately, what we learned last year is that the U.S. stock market is in the early stages of a gradual bull market. Structural growth driven by AI-based earnings continues, and if corporate profit structures remain solid, they can firmly support the downside. Short-term adjustments like tech stock overheating or geopolitical risks may occur, but focusing on long-term diversification and risk management can lead to stable compound returns.

The most important thing when recommending foreign stocks is ultimately ‘consistency’. Following principles like ETF portfolio construction, regular rebalancing, and DCA can help achieve good long-term results even amid short-term volatility.