Positioning ahead of the US 2026 Midterm Cycle

Geneva, 15 January 2026

Dear Valued Investor,

The Great Visionaries certificate is up +17.7% since January 1, while Global Alpha (CHF) has returned +16.0% - both markedly ahead of the S&P 500 (+1.2%) and Nasdaq 100 (+0.9%) over the same period, a start to 2026 that reflects a powerful alignment between innovation, liquidity and macro tailwinds.

In the remainder of this note, we focus on some of the strongest contributors in both certificates year‑to‑date, grouped by business segment to highlight the sectoral forces powering these returns.

Market backdrop and macro drivers

• US core CPI rose 0.2% in December and 2.6% year-on-year, one tenth below expectations, while headline inflation increased by 2.7%, in line with consensus.
• This downside surprise on core inflation reinforces the disinflation hypothesis and gives the Federal Reserve more room to extend its rate-cutting cycle, a configuration historically favorable to growth and technology equities.
• The Consumer Electronics Show (CES) in Las Vegas last week showcased “physical AI” at scale - robots, vehicles and devices embedding on device intelligence - underscoring secular demand for advanced logic and AI processors, high‑performance computing and distributed power solutions held in our certificates.

Space, defense and Earth observation

• Rocket Lab (RKLB, +31.6% YTD) has been propelled by its largest-ever contract: the U.S. Space Force awarded roughly 18 missile tracking satellites in a deal valued around $816 million, with options that could lift the total close to $1 billion, alongside a 100% mission success rate on 2025 launches.
• This contract cements Rocket Lab as a prime contractor in US national security space, expanding its backlog and positioning the “Neutron” launcher for higher value missions at the very moment investors rotate back into quality mid cap space infrastructure.
• Ondas Holdings (ONDS, +38.9% YTD) is emerging as a reference name in counter drone and autonomous systems. Thanks to its “hijack” system - secured via the recent acquisition of Sentrycs - Ondas Holdings can detect, take control of and neutralize hostile drones using cyber over RF protocol manipulation rather than disruptive jamming.
• The acquisition expands Ondas Holdings’ counter UAS portfolio to more than 200 deployments across 25+ countries and, combined with an approximately 1 billion dollar direct offering priced at a premium to market, provides both technological edge and capital to scale globally.
• AeroVironment (AVAV, +57.8% YTD) rallied after securing nearly $900 million of new U.S. Army drone and counter drone contracts, including a five year $874 million framework for JUMP 20, P550 and Puma unmanned systems plus a $13.2 million order for advanced UAV platforms.
• With a book to bill ratio close to 2.9 and about $1.4 billion of fresh bookings, AeroVironment is becoming s a key beneficiary of rising defense budgets and the shift toward autonomous, AI enabled battlefield intelligence.
• Planet Labs (PL, +35.6% YTD) signed a multi‑year, nine‑figure contract with the Swedish Armed Forces, its third major government constellation deal in 12 months after Japan and Germany, bringing total contract value with these European and Asian partners to over half a billion dollars.
• The company, which operates more than 600 satellites across its SuperDove, Tanager and Pelican constellations, is enjoying growing commercial success thanks to its ability to deliver imagery with resolution close to one meter, enriched with analytics that are “ready to use” through tight integration of AI within its data platform.

Quantum computing and advanced computing

• D-Wave Quantum (QBTS, +15.3% YTD) announced in early January a significant breakthrough: a scalable, integrated cryogenic control system for gate based qubits, reducing wiring complexity while preserving qubit performance, a key hurdle on the road to commercial quantum systems.
• The company followed with a $550 million acquisition of Quantum Circuits, deepening its technology stack and broadening its addressable market just as enterprise interest in quantum optimization and simulation accelerates.
• Micron Technology (MU, +16.8% YTD) continues to surf an extraordinary up cycle in high bandwidth memory (HBM) for AI data centers; management has indicated that HBM capacity is effectively sold out for 2026 and that each unit of HBM displaces roughly three units of standard DRAM.
• Strong AI driven demand, tight supply and multi year customer agreements have pushed pricing power back in Micron’s favor, while capacity expansions in Idaho and New York aim to capture structurally higher memory intensity over the next decade.

Energy storage, power and digital infrastructure

• Electrovaya (ELVA, +10.0% YTD) benefits from robust momentum in industrial lithium ion batteries; the company recently reported quarterly revenue of about $20.5 million with earnings above consensus, a return on equity above 14% and net margins above 5%.
• Institutional interest is building, with new positions disclosed by asset managers and a valuation supported by analyst ratings skewed toward “outperform” and “strong buy”, reflecting confidence in its proprietary high cycle life battery technology for material handling fleets.
• Bloom Energy (BE, +53.6% YTD) secured a landmark 2.65 billion dollar order from an American Electric Power affiliate for roughly 900 MW of solid oxide fuel cells in Wyoming under a 20 year offtake agreement, one of the largest fuel cell deployments ever announced.
• Bloom Energy also entered into a separate agreement under which Brookfield could invest up to $5 billion to deploy its systems for AI oriented “factories,” positioning the company at the crossroads of decarbonization and insatiable data center power demand.
• Applied Digital (APLD, +47.20% YTD) stands to gain from the same secular surge in AI and high performance computing infrastructure; hyperscale customers continue to seek specialized, energy efficient data center capacity where Applied’s modular design and digital asset heritage are clear competitive levers.

Healthcare innovation

• Mirum Pharmaceuticals (MIRM, +14.8% YTD) advances its rare disease franchise, with bile acid transport inhibitors gaining traction in cholestatic liver disorders and an expanding label pipeline that deepens its moat in small, clinically driven markets often prized by strategic acquirers.

Breadth, history and outlook for 2026

• Breadth continues to strengthen: for the first time since 2021, more than 90% of Dow Jones constituents now trade above their 200 day moving average, signaling a broad, rather than narrow, advance across the equity complex that historically has preceded higher Dow and S&P 500 levels 6–12 months later.
• The current disinflation phase - core CPI at 2.6% and headline at 2.7% - creates a “goldilocks” window in which real rates can drift lower without rekindling inflation, a setting historically associated with multiple expansion for innovative growth companies.
• Furthermore, academic work on the “midterm election effect” in U.S. equities, notably “Midterm Elections’ Stock Market Surge - An Unintentional Gift from US Politicians” by Bialkowski and Nahavandi, shows that, in nine cases out of ten between 1954 and 2017, the S&P 500 delivered positive returns in the fourth quarter of a midterm year and the following two quarters, compounding to nearly 25% over those three quarters. With U.S. midterm elections upcoming in November 2026, this historical pattern is particularly relevant, as it has often coincided with periods of elevated equity returns.

The factors outlined above suggest that 2026 should materialize as a strong year, with both The Great Visionaries and Global Alpha CHF certificates well positioned to continue their sharp ascent.

Whether you wish to explore how these strategies could complement your current portfolio or deepen your existing allocation, we remain fully available to discuss positioning, risk management and implementation in detail, at your convenience.

If you would like to arrange a dedicated call or meeting to review your objectives in light of these developments, please reach out at any time so that we can tailor our insights to your specific situation.

Best regards,

Wilhelm Sissener, CFA
+41 (0)79 447 57 48
www.starvestcapital.com 

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