Last year, U.S. stocks were so strong that it seemed almost unbelievable. Especially when looking at the recommended list of overseas stocks, the same few stocks keep repeating, and it’s clear that’s no coincidence. It’s a sign that growth driven by strong AI-focused rally is truly solid based on earnings.

Since the end of last year, expectations for interest rate cuts and explosive growth in the AI industry have led the market. The S&P 500 rose into the high 6,000s, up about 12% compared to a year ago. The Dow Jones Industrial Average is also near its all-time high. The biggest feature of the current market is that it’s not just a simple economic recovery, but a new growth engine is forming around AI, semiconductors, and cloud computing.

In fact, 95% of S&P 500 companies expect an average profit growth of 16% next year, and top tech stocks are projected to grow by up to 21%. The ROE of 18%, the highest in 30 years, is also noteworthy. This indicates that the market isn’t relying solely on liquidity but is supported by actual corporate earnings.

When recommending overseas stocks, the first thing to look at is financial health. Apple and Microsoft each hold over $600 billion in cash and cash equivalents, giving them the capacity to maintain share buybacks and dividends even during a downturn. These companies are resilient even in the face of short-term economic slowdown.

Next, assess competitiveness and barriers to entry. Nvidia dominates over 80% of the AI computing GPU market, creating a structural competitive advantage that extends beyond simple chip manufacturing to include the CUDA ecosystem and software tools. Such network effects make it difficult for competitors to catch up quickly.

If we pick 10 notable stocks this year, they are Nvidia, Microsoft, Apple, Alphabet, Amazon, AMD, Meta, Tesla, Costco, and UnitedHealth. Nvidia is the leader in AI acceleration chips, with strengths spanning data centers, networks, and software ecosystems. Last year, revenue increased by 114% year-over-year, with data center accounting for about 91% of total sales.

Microsoft is monetizing Copilot, and the lock-in effect of Azure AI is growing. Apple expects high service revenue growth with on-device AI. Alphabet’s success hinges on Gemini 2.0 and the recovery of YouTube advertising, improving AI search and ad efficiency. Amazon is increasing profitability through AWS margin improvements and retail automation.

AMD is chasing second place in AI accelerators, and as the MI series gains market share, data center mix improvements are expected. Meta is enhancing ad efficiency through AI recommendation engine upgrades, and Tesla is expanding its earnings base with FSD and energy storage. Costco can sustain growth during inflation slowdown, and UnitedHealth benefits from aging demographics and growth in Optum’s data analytics.

The healthcare sector is also worth watching. Eli Lilly and Novo Nordisk posted strong results with obesity treatments, but traditional pharma companies like Pfizer and Merck saw stock declines of 15-20% due to sales slowdown. Excluding obesity drugs and AI diagnostic tech, many say healthcare underperforms compared to the S&P 500.

The clean energy sector is showing weakness in the short term. First Solar and NextEra Energy saw their stock prices fall 20-25% due to increased funding costs. However, the Fed’s easing stance and tax benefits from IRA still support medium- to long-term growth potential.

When actually executing overseas stock recommendations, diversification through ETFs is the most efficient. You can invest in multiple industries with a single purchase. The global ETF market size surpassed $17 trillion in July 2025, with inflows into major fund providers like BlackRock and Vanguard increasing rapidly.

A dollar-cost averaging strategy is also effective. Investing a fixed amount regularly to lower the average purchase price is especially suitable in volatile markets these days. JPMorgan Asset Management reports that the probability of loss over 10 years of consistent investment in the S&P 500 is less than 5%.

Risk management is key to all investment strategies. Basic principles include limiting position sizes, setting stop-losses, and diversifying across sectors. During FOMC, CPI, or earnings release weeks, reducing positions to manage volatility is advisable. Quarterly rebalancing to adjust overheated sector weights is also important.

Ultimately, the market is in the early phase of a gradual bull trend. Structural growth driven by earnings and AI continues, and if the Fed maintains its easing stance, risk asset preference is likely to gradually strengthen. In the short term, factors like tech stock overheating or geopolitical risks may cause some correction, but stable inflation and solid corporate earnings underpin a strong market floor.

The key strategy for the next five years is long-term diversification and risk management. Building a portfolio with ETFs, regular rebalancing, and disciplined dollar-cost averaging can deliver stable compound returns even amid short-term volatility. When receiving overseas stock recommendations, it’s most practical to focus on companies’ financial health and long-term competitiveness rather than following trends blindly.