THE QUESTION THAT COULD DEFINE THE STOCK MARKET
THROUGH 2028 AND BEYOND18 Things Investors Should Watch
Plus: 10 Semiconductor Investments The Arora Report Is Watching
The stock market is at a critical juncture.
Semiconductor and semiconductor-equipment earnings are growing at an extraordinary rate. Artificial intelligence is driving enormous investment. The S&P 500 has broken out to new highs.
But prudent investors need to look beyond today’s headlines.
The key question that could define the stock market through 2028 and beyond is:
Is this extraordinary earnings growth cyclical or secular?
The answer has enormous implications for investors.
If the earnings boom ultimately proves cyclical, the stock market could experience a 30%–50% decline.
If the earnings boom proves secular, the stock market could experience a generational advance on top of the gains already achieved.
There are very intelligent people doing excellent analysis in both camps.
The biggest mistake investors can make is blindly believing either one.
There simply is not enough data yet to know the answer with a high degree of confidence.
The Core Insight
At The Arora Report, we start with the Arora Second Law:
“Nobody knows with certainty what is going to happen next in the markets.”
For many investors, uncertainty is uncomfortable.
However, once investors accept uncertainty, the next question becomes much easier:
What data should investors watch?
Here are 18 of the most important things investors should be watching now.
1. Semiconductor Supply and Demand Curves
The semiconductor boom ultimately depends on supply and demand. Investors should watch closely for signs that new supply is beginning to outpace demand or, alternatively, that demand remains strong enough to absorb enormous increases in semiconductor capacity.
2. GPU Pricing Trends
GPUs have become critical infrastructure for artificial intelligence. Pricing trends can provide important clues about whether AI compute demand remains exceptionally strong or is beginning to normalize.
3. GPU Lead-Time Trends
How long customers have to wait for GPUs can provide an important signal about the balance between supply and demand. Persistent long lead times can indicate continued strength, while rapidly falling lead times can be an early warning that conditions are changing.
4. High-Bandwidth Memory Pricing Trends
High-bandwidth memory is an important component of advanced AI systems. Investors should watch whether strong AI demand continues to support pricing or whether increasing supply begins putting pressure on prices.
5. High-Bandwidth Memory Lead-Time Trends
Lead times for high-bandwidth memory provide another window into the strength of the AI infrastructure buildout. Significant changes can offer investors clues before those changes become obvious in reported earnings.
6. AI Usage Trends
Massive investment in AI infrastructure ultimately needs to be supported by AI usage. Investors should watch whether consumers and businesses continue increasing their use of AI at a pace that justifies today’s enormous capital expenditures.
7. Expensive Frontier Models vs. Cheaper Chinese Models
Not all AI usage creates the same demand for computing power. Investors need to watch the mix between expensive frontier models and much cheaper Chinese models because changes in that mix can have major implications for future compute demand.
8. The Pace of AI Recursive Self-Improvement
One of the biggest potential accelerants for AI is the ability of increasingly capable AI systems to help improve future AI systems. The pace of recursive self-improvement could materially change the trajectory of AI development and the amount of computing power required.
9. Real AI Productivity Gains
AI excitement ultimately needs to translate into measurable economic value. Investors should watch how quickly businesses achieve real productivity gains from AI and whether those gains justify continued aggressive spending.
10. The Adoption Curve for Robots
Robotics could become one of the next major sources of semiconductor demand. Rapid adoption of increasingly intelligent robots could create an entirely new growth cycle for chips, sensors, memory, and computing.
11. The Adoption Curve for Autonomous Vehicles
Autonomous vehicles require enormous amounts of computing, sensing, and artificial intelligence. Investors should watch the speed at which autonomous driving moves from development and limited deployments into broader adoption.
12. Progress Toward Space-Based Data Centers
Space-based computing has the potential to become another major source of demand for advanced technology. Investors should watch technological and economic progress toward putting meaningful computing infrastructure into space.
13. Progress in Quantum Computing
Quantum computing has the potential to create another major compute and semiconductor investment cycle. Investors should watch whether advances move quantum computing closer to commercially valuable applications.
14. The Enormous Increase in Global Defense Spending
Defense spending is increasing significantly around the world. That spending increasingly flows toward sophisticated electronics, computing, communications, sensors, artificial intelligence, and other technologies that can create additional semiconductor demand.
15. Drones and Counter-Drone Interceptors
Modern warfare is rapidly changing, and drones have become increasingly important. The resulting demand for both drones and technologies designed to defeat them could create significant new markets for advanced electronics and semiconductors.
16. Drone-Killer Lasers and Directed-Energy Weapons
Directed-energy weapons have the potential to change the economics of counter-drone defense. Investors should watch progress in drone-killer lasers and related technologies as governments seek scalable ways to defend against inexpensive drones.
17. AI for Battlefield Intelligence, Targeting, and Mapping
Artificial intelligence is becoming increasingly important to modern military operations. Growing use of AI for intelligence, targeting, mapping, and battlefield decision-making could become another important source of demand for advanced computing.
18. Military and Communications Satellites
Demand for military and communications satellites is accelerating. Satellites increasingly require sophisticated semiconductors, communications equipment, sensors, and computing capabilities.
The Next Semiconductor Cycle May Already Be Forming
There is another question prudent investors should consider.
Even if today’s AI-driven semiconductor boom ultimately proves cyclical, could entirely new sources of demand create the next semiconductor cycle?
Five emerging areas deserve particular attention:
- Robots
- Autonomous driving
- Defense
- Quantum computing
- Space-based computing
These technologies could potentially create new waves of semiconductor demand even if today’s AI infrastructure cycle eventually slows.
This is one reason investors need to look ahead instead of simply extrapolating today’s conditions indefinitely.
Bonus
10 Semiconductor Investments The Arora Report Is Watching
The Arora Report portfolios have long been heavily weighted in semiconductors — the strongest performing sector of the market.
Many investors are only now waking up to the semiconductor mania.
Members of The Arora Report were positioned long before the crowd.
Here are 10 semiconductor investments The Arora Report is watching.
VanEck Semiconductor ETF (SMH)
SMH provides exposure across a group of leading semiconductor companies rather than relying on the fortunes of a single company. The Arora Report has been in SMH for the long term, allowing members who followed the guidance to participate in the extraordinary semiconductor advance.
Gain of up to 8,351% for Arora Report members.
Micron Technology (MU)
Micron is an important semiconductor company and a major participant in memory, including memory needed for the AI infrastructure buildout. The Arora Report was positioned in Micron long before today’s semiconductor mania became consensus.
Gain of up to 5,665% for Arora Report members.
Applied Materials (AMAT)
Applied Materials is one of the world’s major suppliers of semiconductor manufacturing equipment. As semiconductor manufacturers expand and upgrade capacity, equipment suppliers such as Applied Materials provide investors with another way to participate in semiconductor growth.
Gain of up to 4,332% for Arora Report members.
NVIDIA (NVDA)
NVIDIA has become one of the most important companies in the AI revolution because of the enormous demand for its advanced GPUs. The company remains important to watch because changes in AI infrastructure spending and GPU demand can have implications far beyond NVIDIA itself.
Gain of up to 1,785% for Arora Report members.
Qualcomm (QCOM)
Qualcomm is a major semiconductor company with deep exposure to wireless communications and mobile computing. As computing increasingly spreads across connected devices, Qualcomm remains an important semiconductor investment to watch.
Gain of up to 451% for Arora Report members.
Analog Devices (ADI)
Analog Devices plays an important role in the chips that connect the digital world with real-world signals. Its exposure across industrial, automotive, communications, and other markets makes ADI useful to watch as semiconductor demand broadens beyond today’s biggest AI winners.
Gain of up to 436% for Arora Report members.
Marvell Technology (MRVL)
Marvell participates in critical areas of data infrastructure and semiconductor technology. As AI data centers require faster networking and increasingly specialized chips, Marvell is among the semiconductor companies investors should continue watching closely.
Gain of up to 533% for Arora Report members.
NXP Semiconductors (NXPI)
NXP has significant exposure to automotive and industrial semiconductor markets. This makes the company particularly relevant as investors watch autonomous driving, intelligent vehicles, and other emerging sources of semiconductor demand.
Gain of up to 268% for Arora Report members.
Advanced Micro Devices (AMD)
AMD is an important competitor in high-performance computing and increasingly in AI accelerators. Its progress is worth watching as customers look for additional sources of advanced computing power and competition develops across the AI semiconductor market.
Gain of up to 174% for Arora Report members.
Texas Instruments (TXN)
Texas Instruments has broad exposure to analog and embedded semiconductors used across industrial, automotive, and electronic applications. Its broad end-market exposure makes TXN useful for understanding semiconductor demand beyond the most visible AI-related areas.
Gain of up to 73% for Arora Report members.
Knowing What to Watch Is Only the Beginning
Knowing which investments have the potential to benefit is important.
But that alone is not enough.
Investors also need to know:
When should I buy?
At what price should I buy?
How much should I buy?
Where should I protect myself if the investment thesis goes wrong?
When should I take profits?
And when should I add to a long-term position?
This is where The Arora Report goes significantly further.
Arora Report members have access to Buy Zones, Stop Zones, Maximum Recommended Quantities, and Target Zones for all 10 semiconductor investments discussed above.
The approach allows newer members to scale into investments at appropriate levels while giving longer-term members guidance on opportunities to add to existing positions.
The objective is not simply to chase the hottest stock of the moment.
The objective is to help investors make prudent decisions designed to maximize the wealth they generate over a lifetime.
A Spot-On Semiconductor Call
Protecting wealth is just as important as generating it.
Recently, The Arora Report had been calling for a correction in semiconductors.
That call proved spot on.
From top to bottom:
VanEck Semiconductor ETF (SMH) fell 25%.
Micron (MU) fell 41%.
SanDisk (SNDK) fell 57%.
At The Arora Report, we use over 100 variables in making our calls.
For the semiconductor correction call, two were especially important.
First, sentiment had reached an extreme positive level. Extreme positive sentiment is a contrary indicator.
Second, momentum crowds dominate today’s stock market, but there are also very intelligent investors. We anticipated that intelligent investors would begin asking an important question:
Are these great earnings approaching peak earnings?
This is especially important because many investors have accumulated very large semiconductor gains.
Large gains are valuable.
Large gains that are intelligently protected can be even more valuable.
Protecting and Growing Wealth
At The Arora Report, we do not believe investors should have to choose between participating in major long-term opportunities and protecting themselves when risk rises.
We use techniques including core positions, trade-around positions, controlled position sizes, stops, targets, and dynamic hedging.
Trade-around positions can help investors take advantage of shorter-term opportunities while maintaining core positions designed to participate in long-term trends.
We have also made dynamic hedging actionable for investors through the Arora Protection Band.
The goal is straightforward:
Participate when opportunities are favorable.
Protect wealth when risks increase.
Stay flexible when the data changes.
Try The Arora Report Free for 30 Days
You now know 18 of the most important things investors should be watching as the stock market moves toward 2028 and beyond.
You also know 10 semiconductor investments The Arora Report is watching.
But markets change every day.
Supply and demand change.
Sentiment changes.
Earnings change.
Risk changes.
And attractive entry points change.
The Arora Report helps investors stay ahead of those changes.
Members receive actionable investment guidance designed to help them know what to buy, when to buy, how much to buy, when to take profits, and how to protect themselves when conditions change.
For the semiconductor investments discussed in this report, members have access to Buy Zones, Stop Zones, Maximum Recommended Quantities, and Target Zones.
This guidance can help newer members scale into positions while helping existing members identify opportunities to add to positions they may have held for years.
All with one overarching objective:
Maximize the Wealth You Generate Over Your Lifetime
Try The Arora Report free for 30 days.
New members often say they wish they had found The Arora Report 10 years ago.