Just two weeks into the new year, and the pace of global change isn’t merely continuing from 2025 but accelerating. Quite a challenge when considering the investment outlook for 2026. The Trump administration has removed a Venezuelan dictator, asserted ambitions in Greenland, and threatened intervention amid Iran’s civil unrest.
Domestically, the Department of Justice has subpoenaed the Chair of the Federal Reserve, while the White House has intervened in critical sectors including credit cards, housing, and defence. It promises to be an eventful year. Making predictions – especially about the future – is always a fool’s errand.
That said, we set out below our “Six for ’26”: six equity themes and sectors that look interesting and offer scope for upside. These themes build directly on the macro risks and questions outlined in Part 1 of our 2026 outlook.
While 2025 was defined by the scaling of large language models and massive data-centre capex, 2026 looks set to mark the pivot to “physical AI” – the point at which artificial intelligence is deployed to control hardware in the real world.
We are witnessing a step-change in industrial adoption, driven by a sharp fall in the cost of deploying complex robotic tasks. What previously required weeks of specialist coding can now be achieved through demonstration in a matter of hours. This shift has the potential to unlock a major new robotics capex cycle.
We see particular opportunity in the higher-margin segments of the robotics value chain, including memory, specialist
semiconductors, and enabling components.
2026 may also be the year when intelligence manifests physically on our roads. The UK has emerged with a surprisingly agile regulatory framework, with the Automated Vehicles Act providing a legal blueprint for commercial deployment.
The fast-tracking of “no safety driver” trials, expected to
commence this spring, creates a pathway for autonomous taxis, buses, and shuttles in selected cities. Regulatory clarity helps bridge the gap between pilot schemes and genuine revenue generation – years earlier than initially projected.
We highlighted the space economy a year ago in The Consequences of Occupying Mars, noting the vast opportunities created by the collapsing cost of escaping Earth’s gravitational pull and SpaceX’s central role in that process.
In December, reports emerged that SpaceX is considering an IPO in 2026, lending further weight to the idea that Elon Musk could soon control two trillion-dollar companies. Beyond SpaceX, a broader ecosystem is taking shape. Satellite operators, rocket engine developers, and space manufacturing projects have all advanced materially, with growing implications for defence and national security. The space economy is no longer speculative; it is becoming strategically essential.
Our constructive stance on China has, until now, focused primarily on innovation-driven sectors such as AI and advanced manufacturing. However, a long-awaited recovery in domestic consumption could provide a second engine of growth.
The persistent gloom surrounding the Chinese consumer is increasingly being challenged by the data. Most notably, Hong Kong retail sales rebounded sharply in late 2025, delivering their strongest performance since the post-reopening surge of 2023.
This recovery has been driven by high-margin categories such as luxury gifts and department store consumables, suggesting that stimulus measures are filtering through to household sentiment.
The market appears to be under-pricing this stabilisation. A recovery in domestic consumption and high-end luxury offers asymmetric upside for investors willing to look beyond historical volatility.
2025 marked the year China lost its “uninvestible” status. 2026 may be the year its growth broadens to encompass consumption as well as production.
The headwinds facing healthcare in 2025, dominated by political uncertainty and regulatory anxiety, have begun to dissipate. This reveals what we believe is an attractive entry point for the sector.
Concerns surrounding RFK Jr.’s stewardship of the FDA and President Trump’s policies on tariffs and drug pricing have proven more benign than feared. The FDA continues to operate under new leadership, with accelerating product reviews, while tariff risks have been mitigated through exemptions for domestic manufacturing. Bespoke pricing agreements with large pharmaceutical companies suggest a pragmatic policy approach that preserves the industry’s ability to invest in innovation.
Healthcare – across pharma, medical devices, services, and biotech – is trading at a meaningful discount to the broader market. The sector is underpinned by three structural drivers: innovation in therapeutics and devices, a resurgence in M&A activity as companies deploy strong balance sheets and rising global healthcare utilisation driven by ageing demographics and the clearing of post-pandemic backlogs.
Historically, healthcare has also tended to perform better in the second year of a presidential term, as policy risks recede. The sector offers a rare combination of defensive resilience and growth potential. 2026 may be the year Big Pharma outperforms Big Tech.
If 2025 was defined by gold and gold miners, 2026 could be the year energy takes centre stage. Oil, gas, coal, and uranium prices all look increasingly interesting from a relative and historical perspective.
Oil is rarely as cheap as it is today in inflation-adjusted terms. Energy producers account for a historically small share of global
equity markets, and consensus opinion remains firmly bearish. Much of this pessimism rests on the belief that we are approaching peak oil consumption. Like China in 2024, energy has become “uninvestible” for many investors.
Recent history suggests caution with such narratives. Copper was widely dismissed ahead of its 33% price rise in 2025, while precious metals were derided as “boomer rocks” before gold rose 60% and silver 140%.*
For the first time in 2025, a barrel of Brent crude could be purchased for an ounce of silver. Today, that figure is closer to 1.5 barrels, perhaps reflecting silver’s overvaluation rather than oil’s decline.
The IEA’s latest World Energy Outlook has quietly abandoned its long-standing forecast of peak oil demand. As global energy consumption rises – driven in part by AI data centres – the “energy transition” may prove to be more accurately described as energy addition.
Since the Global Financial Crisis, capital has overwhelmingly favoured US dollar assets. However, recent events have renewed questions about where global capital is best treated. Dollar exposure and capital repatriation
The DOJ’s subpoena of Fed Chair Jay Powell and renewed geopolitical assertions – from Greenland to Venezuela – have reminded global investors of the scale of unhedged dollar exposure accumulated over the past 15 years. While repatriation was uneven in 2025, it is likely to reassert itself in 2026.
Tariffs and trade policy are now embedded as tools of US national security. While this reinforces US primacy, it also raises the risk profile for global investors. Just as central banks have increasingly favoured gold over US Treasuries, private capital is likely to continue rotating towards undervalued currencies and assets outside the US.
Japan, Europe, the UK, and most emerging markets stand to benefit. Given the extreme concentration of the US equity market, and the liquidity impact of even modest reallocations, the relative underperformance of US equities seen in 2025 may well extend into 2026.
Written by Jeremy McKeown
*https://tradingeconomics.com/
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