đWEEKLY: Cloud vs. concrete
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Catching you up on the weekâs top stories in the Israeli business community
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Palo Alto Networks completed its $25B acquisition of CyberArk and announced it will dual-list on the Tel Aviv Stock Exchange, becoming the TASEâs largest company at a $115B market cap. The move comes as the Knesset advances a âŞ3B tax incentive package to counter the OECDâs Pillar Two reform and prevent multinational R&D centers from leaving Israel. The Finance Committee also debated a controversial 5-year tax exemption for new immigrants targeting Olim in 2026.
Fiscal data showed the warâs impact as Januaryâs deficit widened to 4.9% of GDP with revenues falling 5.4% year-over-year. The Knesset split the Economic Arrangements Bill 60-56, fast-tracking tax hikes while stripping structural reforms. Lawmakers attacked banks for âŞ30B in profits, threatening intervention on deposit-loan spreads.
Defense and tech delivered: Elbit secured a $100M contract for the IDFâs digital transformation, Goodfire raised $150M at a $1.25B valuation, and Camtek received a $25M AI chip inspection order. Real estate saw Israel Canada acquire northern hotels for âŞ142.5M, betting on post-war recovery, while energy infrastructure accelerated with major battery storage and solar deals. The Competition Authority notified El Al of a planned âŞ121M fine for its wartime price gouging.
Editorâs note:
In the Israeli economic reality of 2026, we are arguably witnessing a live demonstration of Thomas Pikettyâs famous inequality equation: r > g.
Piketty posited that the return on capital (r) inevitably outpaces broader economic growth (g). In Israel, this has mutated into a sharper, more dangerous dichotomy: global returns vs. local stagnation.
This week offered a vivid split-screen of this divergence. On one side, the software industrial complex has achieved new commanding heights. The arrival of Palo Alto Networks on the TASE, following its blockbuster acquisition of CyberArk, exemplifies a sector that is structurally hedged against the local risk premium. It trades on global multiples, earns in dollars, and is effectively insulated from the shekelâs volatility.
On the other side lies the tethered economy of the average household. The Ministry of Financeâs data revealing an 11% annual contraction in home purchases isnât just a market cooling; it is the signature of a regulatory surrender. While corporate giants operate with digital agility, the average family is grinding against the friction of post-war recovery, high interest rates, and a state that has failed to protect the middle-class social contract.
This paralysis is not an accident; it is a symptom of the power shift our Editor-in-Chief, Eran Bar-Tal identifies below. We have entered an era where corporate sovereignty eclipses state authority. In a reality where r is leveraged in global dollars and g is constrained by local shekels, inequality isnât a bug in the system - it is the algorithm.
â Sophia Tupolev, TV10 Global Editor
TASE weekly snapshot
The Tel Aviv Stock Exchange delivered a robust performance to conclude the trading week, with major indices finishing in the green. Sustained buying pressure across the board is signaling renewed investor confidence in the Israeli economy.
TA-35 Index (TASE:TA35): đ˘ +2.92%
TA-90 (TASE:TA90): đ˘ +2.21%
TA-125 (TASE:TA125): đ˘ +3.38%
Opinion | Democracy is in danger
By Eran Bar-Tal, Editor-in-Chief, TV10
Last Sunday, the Grammy Awards took place. It is a prestigious event for the music world - often dubbed the âOscars of the music industryâ - awarded by a professional body of creators, producers, technicians, and industry insiders.
Over the years, the categories have expanded to include audiobook recordings. Consequently, U.S. Supreme Court Justice Ketanji Brown Jackson attended the ceremony as a nominee for an audiobook she published. However, this ceremony, too, turned into a political rally - this time against the immigration authority, ICE.
Singer Billie Eilish delivered an acceptance speech in which she inveighed against the immigration authority in language unfit for print, to the applause of the audience. Cameras also caught Justice Jackson rising to her feet and applauding along with the crowd. This is a sitting Supreme Court Justice publicly celebrating calls to dismantle a federal law enforcement agency. It is worth clarifying here: ICE enforces the very federal immigration laws that Jackson is sworn to uphold.
Ostensibly, in the U.S., Jackson has some legitimacy to take a political stand because, unlike the Israeli system, she is part of a political appointment process. However, this is only âostensibly,â because once selected, she swears to uphold and enforce the laws of the state. Thus, even there, this incident reflects a rupture between the branches of government. While tension between branches is built-in and they are meant to represent different interests, a Supreme Court Justice applauding a distinct political stance, voiced through vulgarities, is a crossing of lines - even in the U.S.
And this is not the first boundary crossed in recent years regarding the stately conduct of U.S. authorities - the Executive, the Legislative, and the Judicial. Why does this sound so familiar to us?
What is happening to the quality of leadership candidates?
It is not just in the U.S. and Israel that an unprecedented crisis threatening democracy is unfolding. This crisis manifests in a scarcity of worthy candidates for national leadership (Presidency, Prime Ministership); in a lack of trust in elections; in challenging relationships between security agencies and the governments responsible for them; and in the powers of the Judiciary.
In the U.S., they are certain this is a localized crisis regarding the implementation of the Trump administrationâs immigration decisions. In Israel, a large part of the public believes ours are localized disputes surrounding legal reforms and military conscription.
In the UK, social pressures led to a government plan for âpopulation diversificationâ in towns outside London, designed to bring more Muslims to places where their integration is difficult due to traditional British character. As expected, these plans do not pass easily and are challenging the authorities. Japan went to elections just months after the previous ones, against the backdrop of a government plan for fiscal expansion.
However, contrary to the unique feeling in each country - as if these are very specific problems challenging their specific authorities - this is no coincidence. Governments in democratic countries are less stable, and the basic principle of the separation of powers faces sharper challenges than those we have known in recent decades.
The consensus around enforcement actions is shaking, as is the consensus regarding the Judicial branch, which effectively refuses to implement the Executive branchâs policy without adding its own moral, social, and political stance. If we add to this the scarcity of candidates for government leadership and their quality across different nations, we understand that democracy is indeed destabilizing - not just in Israel, and not just in the U.S. - but the system itself.
Human capital has defeated natural resources
The most logical hypothesis, in my view, to explain this phenomenon is that the power of money has gained momentum and is poised to defeat the power of central governance.
In a world where natural state resources were the most valuable assets and were controlled by nations, governments were the undisputed centers of power. Up until the turn of the millennium, the value of major corporations did not equal the value of oil and gas fields, for example.
But then two young Jewish men, Larry Page and Sergey Brin, founded Google. By 2004, it was already worth $24 billion. Six years later, it was worth $200 billion, and today it is worth $4 trillion. By comparison, all of Israelâs massive gas reserves are worth a few hundred billion dollars - less than 10% of Google.
Nvidia, Apple, Alphabet, Microsoft, and Amazon - the largest companies in the world - are worth approximately $18 trillion. They, and those following them, are the power centers of the new world. They are not tied to natural resources; they are a human resource.
These companies are more loosely dependent on the state than companies were in the past. They are spread across countries and can move power centers from place to place. Their shareholders and executives are located at the power centers of the new world. The finest middle-aged minds in the world, seeking centers of influence, no longer look for them in parliaments - because, to a large extent, power is no longer there.
But it is not just at that level. In the U.S., there are currently about a thousand billionaires. In the UK and Europe, there are another 250 billionaires, and dozens more live in Japan, for instance. All of these possess more power than members of parliament, who are usually influenced by them to a great degree.
Even at the lower level, citizens of democratic countries have much more power than they had in the past. Their income is largely more diversified than just from workplaces - they earn from capital markets and real investments, which became global long ago. The implication is that the ability to control them has weakened.
They can simply choose where to invest.
Snapshot | The divergence among Israelâs economic sectors and the power gap
TV10 Global Team
As Bar-Tal argues that corporate power is eclipsing the stateâs, the divergence between Israelâs tech sector and its real estate market this week offers local evidence.
On one side, the software economy is mobile, global, and booming. Palo Alto Networks (NASDAQ:PANW) completed its acquisition of CyberArk and landed on the Tel Aviv Stock Exchange under the ticker CYBR. With a market cap of $115 billion, Palo Alto is instantly larger than Teva, Bank Leumi, and ICL Group combined.
By listing in Tel Aviv, CEO Nikesh Arora offers investors a âsafe harborâ - a way to park capital in a global cyber-sovereign that operates above the fray of local geopolitics.
On the other side: The real estate economy is immobile, local, and bifurcated. While the Ministry of Finance reported that apartment purchases in 2025 dropped 11%, with December transaction volumes declining 24% year-over-year, the enterprise side of real estate is telling a different story.
While the individual buyer is stepping back, with contractor sales to families plummeting 41%, capital is rushing in to fill the vacuum. This week, developers Prashkovsky (TASE:PRSK) and Donitz Elad (TASE:DUNI) successfully raised a combined NIS 500 million via bond issuances. Prashkovsky saw massive institutional demand of NIS 810 million, more than double what they sought, closing at a remarkably low interest rate of 2.67%.
The new social contract?
As we navigate the complexities of 2026, we are observing not the death of the State, but a fundamental re-negotiation of the social contract.
While it is true that capital has become hyper-mobile, it remains a historical fact that capital is also inherently risk-averse. Multi-trillion-dollar valuations cannot exist in a vacuum; they require the foundations that only a State can provide: the rule of law, the enforcement of property rights, and the physical security of the infrastructure that houses the cloud. Even the most advanced AI agent requires a data center protected by a national military and powered by a state-regulated grid.
The contraction in the housing market and the struggles of the tethered economy represent the Stateâs most potent remaining lever: the monopoly on the local environment. By setting interest rates and defining regulatory boundaries, the State still dictates the economic friction that even the largest global corporations must manage to remain operational.
Ultimately, the real story of 2026 is interdependency. Cloud and concrete are becoming a single, integrated ecosystem. While tech giants provide the digital expanse we live in, the State remains the earth that sustains it. We are not moving toward a world without nations, but toward a co-Sovereignty where the Stateâs relevance is defined by its ability to provide stability in exchange for innovation. The true challenge for the coming year is ensuring that as the State negotiates with the new power players, it does not forget who it is supposed to be serving: the citizen on the ground.
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Disclaimer: This brief is for informational purposes only and does not constitute investment advice. All data is current as of publication date.