University of Kwazulu-Natal

2026 Investment Trends And The Four Themes Driving Markets

Bonisiwe Shabane
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2026 investment trends and the four themes driving markets

Reading through dozens of 100-page investment outlooks to identify common themes for the year ahead is a daunting task. Fortunately, there are some great tools available to summarize research reports sift through all the different points of view. Below are four major themes common in most of the 2026 investment outlooks. After reviewing 18 reports, four themes emerged again and again in the 2026 outlooks. Several firms referred to what is happening in AI as an infrastructure revolution. Fears of another tech bubble are understandable, but the current AI boom is fundamentally different from the dot-com era.

Analysis from Barclays and Morgan Stanley point to the fact that today’s leaders are highly profitable, cash-generative companies, unlike their speculative, often profitless, counterparts from the dot-com bubble. Hyperscaler capital expenditures are expected to continue, with increased investment in sourcing energy to meet growing demand. The data centers required to train and run advanced AI models are incredibly power-intensive. Goldman forecasts indicate that power demand from data centers is set to grow by more than 175% by 2030 compared to 2023 levels, creating a massive, long-term investment theme in energy and utilities infrastructure. Fidelity semiconductor analyst Jonathan Tseng addressed the doubters nervous about ROI on the huge infrastructure spend: “So far, AI models continue to improve and productisation is proceeding rapidly.

If that works, then everything else will work. Trying to claim that you conclusively know that AI doesn’t deliver value based on old data and old models is like looking at the Wright Flyer and deciding that mass air travel will never... AFTER AN EXTRAORDINARY AND SURPRISING YEAR that saw the S&P 500 record double-digit gains and corporate profits outpace expectations, what comes next? Do equity markets have more room for growth? Are stock valuations too high? What, if anything, could derail economic growth and the market’s resilience?

“From energy grids and data centers to defense systems and digital platforms, power is driving the global economy — and shaping the outlook for 2026.” Chris Hyzy, Chief Investment Officer for Merrill and Bank of America Private Bank, believes the U.S. economy and financial markets are powering up for a new level of potential growth. “From energy grids and data centers to defense systems and digital platforms, power is driving the global economy — and shaping the outlook for 2026,” he says. Below, find answers from the Chief Investment Office (CIO) and BofA Global Research to four top-of-mind questions about the potential risks and opportunities ahead. Plus, test your knowledge of current market dynamics.

For additional useful insights and lively conversation, watch the Outlook 2026 webcast “Powering up: What could drive the next era of growth?” “The U.S. economy is firing on all cylinders,” says Joe Quinlan, head of Market Strategy for the CIO, who cites six reasons equity prices could potentially keep advancing: This article is part of our Investment Outlook 2026: Seeking Catalysts Amid Complexity The investment landscape is being reshaped by evolving megatrends, presenting both challenges and new opportunities for strategic capital deployment. In 2026, we expect economic security to remain a priority focus for nations and corporations.

This theme is being amplified by turbulent geopolitics, a new trade order, persistent inflationary pressures, and energy-intensive artificial intelligence. Meanwhile, sustainable investing is maturing with a greater focus on performance. We favor a focus on themes including renewable energy, grids, energy storage, and companies solving critical pain points, offering cost savings, or providing essential value chain links. After a year dominated by headlines surrounding tariffs and AI capex announcements, we believe economic security will be a prominent theme in 2026, helped by continued corporate resilience as interest rates head lower. Geopolitical flashpoints, NATO defense commitments, and renewed momentum in US and European reindustrialization efforts highlight a global imperative among economies and companies to build resilient supply chains, secure critical resources, and strengthen defense capabilities. In our view, this environment creates substantial opportunities for active managers to identify and capitalize on companies strategically positioned for this shift.

Tariffs are fundamentally reshaping global trade flows by incentivizing businesses to prioritize supply chain security, leading to a strategic shift towards shorter, more resilient, and reliable networks. This transformation is not a new phenomenon but has been accelerated by the imposition of tariffs and growing geopolitical tensions. In response to the increased costs, uncertainty, and risks associated with long-distance supply chains, companies continue to move away from a pure cost-efficiency model to one that values flexibility and risk mitigation. Critical resources, including energy and raw materials, continue to gain heightened strategic importance. Vulnerabilities are starkly illustrated by current global dependencies: China accounts for ~60% of rare earth production.1 Similarly, ~90% of the world’s leading-edge semiconductors critical for AI’s future development are manufactured in Taiwan.2 We believe... Unfortunately, the page you requested is temporarily unavailable.

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