Year-End Roundtable: From Tariffs to AI, What 2025 Taught Us and What 2026 Might Demand

A Year That Refused to Sit Still

This was supposed to be a quiet year-end discussion. It turned into something else entirely.

2025 was exhausting, volatile, and narrative-driven in a way few years ever are. From euphoric optimism after the election to outright panic after Liberation Day in April, the market lurched from one extreme to another and then somehow finished strong.

After tariffs were announced in early April, major indices fell more than 20 percent in a matter of days. Sentiment collapsed. And yet, from those lows, the market staged a powerful recovery. By year end, many investors found themselves asking how so much damage, fear, and confusion could coexist with a still-rising market.

To make sense of it, I sat down with Dan Ives of Wedbush and Chris Verrone of Strategas for a year-end roundtable. The goal was simple. Understand what really mattered in 2025 and what is likely to matter in 2026.

The One Thing That Never Broke: Credit

Chris made a point early that framed the entire discussion.

For all the drama, one thing never cracked. Banks stayed strong and credit conditions remained calm. That mattered more than almost anything else.

For two straight years, the core thesis has been that as long as banks are functioning and credit markets are orderly, the market trend remains up. That thesis survived tariffs, AI scares, rate volatility, and sentiment collapses.

Bank stocks worked all year. Credit spreads stayed contained. The 10-year yield stayed in a surprisingly narrow range. Underneath the chaos, the foundation held.

AI: Revolution, Bubble, or Something More Complicated

From Dan’s perspective, 2025 was one of the most intense years of his career.

AI is now in year three of what he sees as an eight- to ten-year buildout. Capex is not slowing. In fact, it exceeded expectations by a wide margin. Hyperscalers doubled down after every scare, whether it was tariffs, geopolitics, or questions about returns.

The central investor concern is straightforward. When does monetization show up?

The fear is not that AI is fake. The fear is that spending runs ahead of revenues long enough that investors lose patience and force companies to pull back, turning a concern into a self-fulfilling slowdown.

Dan’s counter is simple. Demand for AI infrastructure remains overwhelming. In Taiwan, demand for advanced chips still exceeds supply by multiples. Only a tiny percentage of global enterprises have meaningfully adopted AI. Europe is barely started. Sovereign adoption is just beginning.

From his vantage point on the ground, this does not resemble the end of a cycle. It looks like the middle of one.

The Two Real Risks to the AI Story

I pushed back on one point, not because I doubt demand, but because risks matter.

The first risk is physical. Power. Data centers cannot run without electricity, and energy infrastructure takes time to build. Delays here do not kill the AI story, but they can push it out and create air pockets in the market.

The second risk is intellectual and more fundamental. There is a growing view that endlessly scaling large language models may be hitting diminishing returns. This was once a fringe argument. It is now being echoed by people who helped build the technology.

If scaling stops being the answer, chip demand eventually slows. That would reverse the virtuous cycle driving the entire complex.

Dan’s view is that this concern is premature. Models will get cheaper. The real value shifts to data, enterprise use cases, robotics, autonomy, and physical AI. In that world, AI does not shrink. It broadens.

Derivatives of the AI Trade

One of the most interesting parts of the discussion was how the AI trade is evolving.

The first phase was obvious. Chips and hyperscalers.

The next phase is less obvious. Software platforms enabling enterprise deployment. Cybersecurity protecting AI-driven systems. Power, commodities, and materials feeding the buildout. Even banks improving efficiency through AI adoption.

Dan highlighted software names tied directly to enterprise use cases and infrastructure. Chris focused on second- and third-order effects, including commodities, industrials, and even financials as AI beneficiaries.

The takeaway was clear. AI leadership is rotating, not disappearing.

Oracle as a Case Study in Narrative Risk

Oracle became the poster child for how quickly narratives can turn.

After reporting massive AI-driven backlog growth, the stock collapsed as investors fixated on capex and debt. Credit default swap spreads widened. Headlines turned ominous.

Dan’s view is that the market overreacted. Oracle is not a hyperscaler by history, but it is becoming a critical infrastructure provider. The debt looks scary in isolation, but in the context of a multi-year buildout and enormous contracted demand, it may prove manageable.

The broader lesson was not about Oracle specifically. It was about how lightly investors should hold narratives. In 2025, conviction without humility was punished repeatedly.

Housing: Still Dead

On housing, there was no disagreement.

Higher rates have not helped. Lower rates have not helped. Housing remains frozen.

The problem is not demand. It is supply, zoning, regulation, impact fees, and local politics. Until those change, housing affordability will not improve meaningfully, regardless of mortgage products or federal incentives.

For housing stocks, the next few weeks matter. If they cannot begin to anticipate remembered improvement in 2026, that tells you something important.

Financials: Quiet Leadership

One of the least appreciated stories of 2025 was financials.

Globally, banks made new highs. Not just in the US, but across Europe and Japan. This was not simply a deregulation story. It was a normalization story.

Banks are better capitalized, better run, and less reckless than they were before the financial crisis. After nearly two decades of penance, some of the handcuffs are coming off.

Chris argued that 2026 may mark a rotation within financials. Money center banks have led. Regional banks could be next, especially if bank M&A finally returns after decades of suppression.

What Lagged and Why That Matters

Some of the most interesting opportunities often emerge from what has been left behind.

Traditional software struggled as investors feared AI would erode moats. Consumer staples were ignored. Healthcare fell to historically low index weightings.

Chris made a compelling case that healthcare’s extreme underweighting alone makes it worth watching. Not because of AI hype, but because positioning became too pessimistic.

Private credit and alternative asset managers also suffered unusually deep drawdowns for a bull market. The fear is understandable. The data is opaque. But without a recession, it is hard to argue that private credit alone causes systemic damage.

Looking Ahead to 2026

Predictions are dangerous, but themes matter.

Chris sees a handoff underway from purely speculative, liquidity-driven assets toward the real economy. Transports, regional banks, commodities, and industrials may finally get their turn, potentially as AI derivatives rather than alternatives.

Dan remains firmly bullish on tech, particularly second- and third-order AI plays. He believes monetization will surprise to the upside and that large-cap tech still has room to outperform.

On crypto, there was skepticism. Weak price action may be signaling that 2026 is less about high-beta speculation and more about assets with cash flow and carry.

Final Thought

What defined 2025 was not just volatility. It was narrative fragility.

Markets swung violently on headlines, tweets, earnings calls, and rumors. Yet beneath it all, the system held. Credit stayed calm. Banks stayed strong. Capex continued.

The lesson is not to predict the end of the world or dismiss risk. It is to stay flexible, respect price action, and recognize that transformational cycles last longer than most investors expect.

2026 will bring its own chaos. The only certainty is that the story will change again.

Until next time, this is Steve Eisman, and this has been The Real Eyesman Playbook. .
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This post is for informational purposes only and does not constitute investment advice. Please consult a licensed financial adviser before making investment decisions.