Signal & Brus

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It is easy to spot a future trend and then look for a stock that fits it. But the stock market rarely rewards people simply for guessing the future correctly. It rewards those who also understand what is already priced in. Here are six forces I believe will shape the next one to three years, and why they could pull the market in different directions.

1. Sweden is waking up, but interest rates may rise with it

The Swedish economy has begun to recover. The National Institute of Economic Research expects the downturn to fade during 2027 and GDP to grow by 2.4 percent this year and 2.8 percent next year. If households become more willing to spend, the effects could be felt from retail and banking to industrial order books. Source: the Institute’s August forecast.

At the same time, it is risky to build a stock-market scenario on interest rates falling indefinitely. The Riksbank left its policy rate at 1.75 percent in September, but signalled that increases could begin as early as this year if the outlook holds. A stronger economy could therefore bring higher corporate profits and higher financing costs. That matters especially for property companies and richly valued growth stocks. Source: the Riksbank’s decision of 24 September 2026.

2. AI must start showing up in earnings

AI is already a major investment trend. Semiconductors, data centres, cooling and electrical equipment are in the spotlight as capacity expands. The IEA expects data-centre electricity use to more than double to around 945 TWh by 2030. Source: IEA.

To me, the next question is more interesting: which ordinary companies can use AI to sell more, work faster or improve their margins? The next wave of winners may be there. But a great technology does not guarantee a great investment. If the market already assumes perfect results, even a good quarter can disappoint shareholders.

3. Electricity becomes a bottleneck and a business opportunity

As AI, industry and transport require more electricity, the need for grids, generation and more efficient use grows. The IEA estimates that global electricity demand will rise by an average of 3.6 percent a year from 2026 to 2030. That could create work for electrical-equipment suppliers, engineering consultants and some industrial companies. Source: IEA, Electricity 2026.

But more expensive energy is also a cost. The same development that brings a supplier more orders can squeeze its customers’ margins. It makes more sense to track actual orders and profitability than to buy everything labelled electrification.

4. Europe’s defence spending will last

Europe is building up its defence capability. The EU’s Readiness 2030 plan aims to mobilise up to €800 billion in additional defence spending. That points to demand for equipment, technology, security and parts of the industrial supply chain over several years. Source: European Commission.

The decisive stock-market question is which companies win contracts, deliver on time and retain their margins. Political appropriations and company profits are not the same thing.

5. Geopolitics can pull in two directions at once

Conflicts and trade barriers can slow demand while raising the cost of energy, transport and inputs. That is a difficult combination for equities: profits come under threat while inflation makes it harder for central banks to cut rates. The IMF identifies renewed conflict and trade tensions as risks in its latest global outlook. Source: IMF, July 2026.

For Sweden, the krona matters too. A weak krona can boost exporters’ revenues when converted into Swedish currency, but it can also make imported goods and energy more expensive. Each company needs to be examined from both sides.

6. Valuation decides whether a winner is also a good stock

You can be right about almost everything above and still lose money by buying the wrong stock at the wrong price. A company may grow fast while the expectations embedded in its share price grow even faster. So before I let a major trend guide a purchase, I want to ask three questions:

• Are orders, cash flow and profits already growing, or is it mostly a story about the future?
• What must the company achieve to justify today’s valuation?
• What happens to the calculation if interest rates or energy costs rise more than expected?

My conclusion

My main scenario is a Swedish economy that keeps strengthening, while interest rates give the stock market no free lift. AI, electricity and defence create real investment needs. In the short term, I therefore expect the market to distinguish more sharply between companies that can show results and those merely associated with the right theme.

The main signal I intend to watch is simple: are company profits growing faster than expectations? That is where a trend finally becomes an investment.

This is a discussion of possible developments, not a certain forecast or a recommendation to buy.

This translation was produced with AI assistance from the author’s Swedish article. The featured image in the original is AI-generated.