We are about to see the strongest stock market performance in our life.
I believe that 2027 will be an incredible strong year for stocks and here’s how to position yourself.
I’ve spent most of this year writing about the same thing from four different angles: the capital spending cycle in technology, the semiconductor buildout underneath it, the electricity needed to run it, and the momentum money that follows all three. Those were four separate articles making one argument.
I’m bullish on big tech through 2027, and this month I put $5,000 into a fund that pays about 11% a year on the exact companies driving that argument. I’ll be building the position over time.
👉 What you'll get out of this:
The four legs of my bull case with the numbers behind each. Why being bullish should change which income funds you buy. And the fund I opened a position in, with what would make me stop adding.
👉Paid subscribers get access to my holdings through the Yieldly Dashboard.
Check out my prior buy alert, which is now up roughly 9% since that article was published.
Why I’m Bullish
Hyperscaler capital spending growth peaked near 91% year over year in the first quarter of 2026, and consensus has it decelerating toward single digits by the end of 2027. Decelerating growth is very different from declining spend, since the absolute dollars stay at record levels while the rate of increase flattens, and that flattening is where free cash flow starts expanding again.
As we can see below, Goldman Sachs estimates that capex spending will likely slow through 2027. Once that happens, I think confidence will be restored in the mega-cap leaders like META 0.00%↑, AMZN 0.00%↑, MSFT 0.00%↑, NVDA 0.00%↑.
The semiconductor spending behind this cycle runs to roughly $1.3 trillion, and fabs, packaging capacity and equipment orders get placed years ahead of the revenue they serve. That money is already moving whether sentiment improves next quarter or not. So I anticipate semiconductors will likely remains healthy over the next 48 months as well.
Moving on, the power demand is contracted.
The International Energy Agency puts data center electricity around 415 terawatt hours in 2024, rising to roughly 945 by 2030 in its base case, and Morgan Stanley puts US demand near 74 gigawatts by 2028 against a shortfall of about 49. Nobody builds that unless the compute demand behind it is already booked, and I’ve been trading the energy side of this story since the spring.
The rally is broadening.
The ten largest companies made up 37.6% of the S&P 500 as of August 14, down from a record 41.2% earlier this year, and equal weight is beating cap weight in 2026. A market that widens while the leaders keep spending is healthier than one carried by ten names.
