Israel TA-35 Index Investment Value and Risk Assessment Report

Based on collected data and analysis, I will provide you with a comprehensive assessment of the Israeli stock market against the backdrop of geopolitical risks:

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According to the latest data, the Israel TA-35 Index achieved an

[1], making it . The 1.76% rise in the closing price that day reflects the continuation of positive market sentiment. The index currently stands at , with a market capitalization of approximately (about 30 billion US dollars)[1].

• The TA-35 Index’s annual increase leads globally, outperforming major developed markets including the S&P 500 (+3.08%)[0] and Nasdaq (+3.00%)[0]
• The biggest winners include: Space-Communication (+1,437%), Aryt Industries (+369%), CIE Defense (+253%)[2]
• The banking sector performed prominently, with Bank Hapoalim (Israel National Bank) stock price rising by approximately 70%[6]

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In 2025, Israel’s high-tech industry set a historical record with

, almost three times that of the previous year[5]. Highlights include:

• Active M&A activities in the cybersecurity, artificial intelligence, and enterprise software sectors
• Google’s acquisition of cloud security company Wiz for
  32 billion US dollars
  , becoming the largest M&A deal in Israel’s history[5]
• The high-tech industry accounts for
  20%
  of Israel’s GDP,
  53%
  of exports, and
  12%
  of employment, serving as the core engine of economic growth[5]

Ongoing geopolitical conflicts have significantly boosted defense demand:

• Stock prices of defense-related companies rose sharply (Aryt Industries +369%, CIE Defense +253%)[2]
• Government budget focuses on defense, supporting industry development

Israel signed a

with Egypt, providing long-term growth momentum for the energy industry[Web Search]

The OECD predicts that Israel’s economic growth will accelerate from

in 2025 to in 2026, and maintain a strong growth rate of in 2027[5]. This expectation is based on:

• Prospects of hostage release and ceasefire agreements
• The private sector will lead economic expansion after military spending contracts
• Backlogged investments will be released after peace

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• The Gaza war has entered its second year, with repeated ceasefire negotiations and an unstable situation[Web Search]
• Israel threatens to suspend some aid organizations’ activities in Gaza starting January 1, 2026, which may exacerbate the humanitarian crisis and international pressure[Web Search]
• The risk of Red Sea shipping disruptions persists, threatening global supply chains

• War spending caused the fiscal deficit to worsen from a 0.3% surplus in 2022 to an
  8.1%
  deficit in 2024[5]
• The 2025 deficit still reaches
  5.4%
  , with defense spending remaining high[5]
• Credit rating downgraded in 2024, although still maintaining investment grade[5]

• Military conscription leads to labor shortages in the technology industry
• Logistics disruptions affect export businesses

Despite tense situations, the conflict has not spilled over on a large scale to other Middle Eastern countries.

The United States’ security assistance to Israel remains at a high level.

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Supporting Factor	Analysis
Strong Technology Fundamentals	Israel’s technology industry’s innovation capabilities and global competitiveness remain intact; deep technology fields such as artificial intelligence, cybersecurity, and quantum computing will continue to drive growth[5]
Long-Term Defense Demand	Geopolitical tensions are difficult to fundamentally ease in the medium term; defense spending will remain high, supporting the performance of related companies
Expectations of Economic Recovery	Private sector investment and consumption will rebound after a ceasefire, with positive economic growth expectations[5]
Relatively Reasonable Valuation	Despite the sharp rise, compared with the profit growth potential of the technology industry, valuations may not fully reflect future value

Risk Factor	Potential Impact
Conflict Escalation or Prolongation	May lead to a short-term sharp market correction (analysts predict that if the crisis worsens, the TA-35 may fall by 3-5%)[Web Search]
Global Tech Stock Correction	High valuations of U.S. tech stocks may trigger a correction that could spill over to Israeli tech stocks
Shekel Exchange Rate Fluctuations	Currency depreciation may push up import costs and inflationary pressures
Policy Uncertainty	Domestic political divisions may hinder reform progress

According to web search charts, the TA-35 Index showed a clear upward trend from 2020 to mid-2025, accelerating upward in 2025 but with fluctuations during the period[3][4].

• The index has broken through historical highs and entered a technically strong zone
• Short-term RSI may enter the overbought zone, with a risk of correction
• The long-term trend line remains intact, and the medium-term upward trend is not broken

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• Cautiously Optimistic
  : Positive market sentiment, but volatility will remain high
• Focus on Ceasefire Progress
  : Any positive progress may trigger further rises
• Sector Rotation
  : Tech stocks may consolidate in the short term; defense and energy sectors are relatively resilient

• Structural Opportunities
  : Deep technology fields in the tech industry (artificial intelligence, semiconductors, quantum computing) have long-term growth potential[5]
• Defense Theme
  : Defense industry orders are guaranteed against the backdrop of sustained geopolitical tensions
• Energy Exports
  : Natural gas agreements bring stable cash flow

• Diversified Investment
  : Diversify individual stock risks through TA-35 Index ETFs
• Hedging Tools
  : Consider using options or inverse ETFs to hedge downside risks
• Dynamic Adjustment
  : Dynamically adjust positions based on geopolitical progress

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• Strong fundamentals of the tech industry, driven by innovation
• Long-term defense demand supports related sectors
• Positive expectations of economic recovery
• Global capital seeks opportunities in emerging markets

• Geopolitical conflict uncertainty is the biggest variable
• High fiscal deficit restricts policy space
• Short-term valuations have risen sharply and need time to digest

The strong performance of the Israeli stock market in 2025 has fundamental support, especially the structural advantages of the tech and defense industries. However, geopolitical risks will continue to affect market sentiment and short-term trends.

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[0] Jinling API Data - U.S. Stock Market Index Data (November-December 2025)
[1] TASE Official Website - TA-35 Index Data (as of December 31, 2025)
[2] Ynet News - “Who soared and who sank: the Tel Aviv Stock Exchange’s…” (2025 Annual Performance Review)
[3] TradingView - TA-35 Index Technical Chart
[4] Caixun Society - TA-125 Index Five-Year Trend Chart (including 2025 performance)
[5] OECD Economic Outlook - Israel Economic Forecast (2025-2027)
[6] Calcalistech - “Israel’s high-tech resilience: How 2025 became a record year…”
[7] U.S. Department of State - 2025 Israel Investment Environment Statement
[8] WSJ - Israel, Egypt Sign $35 Billion Gas Deal
[9] Bloomberg - Israeli Cabinet Backs Budget Heavy on Defense Spending
[10] Sina Finance - Israel Bans Aid Organizations: Adding Fuel to the Middle East Powder Keg
[11] Xinhua News - Year-End Feature | Looking Back at 2025: The World Moving Forward in Changing Situations
[12] Investing.com - Israel shares higher at close of trade; TA 35 up 0.43% (December 28, 2025)