Thematics for 2026
Investment themes I like for 2026
If we look at 2025, it certainly was a different year for the market. New technologies such as AI and its supply stack dominate the investment land, there have many attempts to knock this off its perch yet it remains rather strong. The US government has gotten involved in the capital markets and are now looking towards these technologies as a way to maintain its economic and technical supremacy across the world, and they aren’t afraid to put their money where their mouth is. In addition to this we have seen a lot of quantitative tightening leading to a concentration in the market, making some of the 2025 thematics perform much better than others.
What am I keeping from 2025?
Pharmaceuticals
Pharma did fine in 2025 with some big wins and big losses. Originally the thesis was that the GLP-1 drug would have such a huge impact on society that the government would subsidise it in order to ward off its comorbidities.
Unfortunately for a long time RFK Junior was against using these drugs for that purpose but in november changed his tune, this means that we might be leaving some money on the table before the government makes a move, making it silly to pull out now, as I believe the market still has a massive amount of room to grow.
The biggest win of 2025 for pharma thematics was the inclusion of HIMS, having a massive 52% gain throughout the year with their explosive revenue and subscriber growth, the biggest loss was NVO down 43% for the year, the PE ratio for Novo Nordisk is currently at ~14 which is much less than LLY trading at ~48, so I am hoping for a mean reversion due to the fundamentals largely being the same as the original buy price.
Generally the performance for this thematic sits around 22% for the year, which is fine, however I really want outsized performance in 2026 for this sector, especially because of government involvement and better therapies such as pills rather than injections.
The Basket will remain the same: NVO, LLY, HIMS, IHE, IBB, ABT, VHT.
AI
Its been a tumultuous ride for AI this year, lots of excitement combined with lots of dread from over capitalisation. Both sides are correct, depending on your investment horizon. I wrote about this a bit in AI+You (especially the investment side). Notably the AI thematic for 2025 is divorced from the energy and semiconductor aspect, so we are just focusing on the big model companies. In the above article I wrote that Google was the one to watch as they were mastering the most amount of the stack, and indeed since then GOOG has grown by 22% in the space of a few months. I still have an incredibly bullish outlook for Google, I expect it to be the most valuable company in the world in 3-4 years due to its ability to create the best models, its own hardware, and improvements to both the software and hardware stack that can lead to big energy efficiency gains, which Satya Nadella admitted was the major bottleneck of AI buildout.
I am not too worried about Michael Burrys PUT on the sector, his argument boils down to the amoritization of chips being an accounting trick to make it look like the sector is healthier than it is, and he is right that the accounting has changed, however I have seen first hand that chips as old as 5 years (such as A100’s) still have high utilisation for AI workloads, so this rings true to me.
One thing that does bother me was the sector pumps where companies would announce large deals with others in the future based off growth, such as OpenAIs deal with AMD, see the video below for these questions being asked.
Having said that, looking at the bright side of AI, I think it represents one of the biggest computing leaps we have made as a species. Hallucination is largely becoming a solved problem, and they continue to outperform on reasoning and other tasks. Although organisations are struggling to use AI efficiently, we have to remember it is the first innings of this technology and the fact that so many are using it efficiently in its current state is a very big win.
A big miss this thematic had this year was the exclusion of Intel. This company looked like it was in bad shape with the former CEO asking people to pray for its 100k employees as it announced its quarterly results, however because the US government decided it was strategic they made a large investment in it pumping this stock back up, and indeed since then they have been making deals with Nvidia to get back on their feet. After all this though, I am still not sold enough to invest, I need to see some big wins for 2026, perhaps if the chipmaker shows that these deals and investments are yielding some market results 2027 can be a different story.
An inclusion we will make is Broadcom, it was a mistake to leave it out for 2025. Google are using it to create their TPUs. As one of the big chip makers in the states, companies such as Apple are trying to de-risk themselves from the tariff wars by inking deals with Broadcom for production of their chips onshore. JP Morgan has set a healthy price target of $462 for next year (a 28% increase).
Nvidia had a particularly strong earnings in Q4 beating their estimates and completely selling out of their Blackwell series of GPU clusters. Overall we are still looking very healthy in this sector.
The Basket will remain the same with one notable inclusion, Broadcom, and the exclusion of Micron (due to moving to the Storage theme): AMD, TSM, ARM, QCOM, SMH, SOXX, ASML.
Crypto
You might be looking at the price of Bitcoin right now disappointed, but what you are actually looking at is the extreme volatility of the crypto markets. If you filter the noise, crypto is having an amazing year, with stablecoins becoming normalised and the US government providing much needed rules for the road (regulation) rather than the sue first and ask questions later approach, this sector has never been more poised to keep investors happy.
One thing to remember about cryptocurrencies themselves is they are an incredibly volatile asset, so even if they may be down in the moment, it is best to look at the long term trend of where they are heading via something like a simple moving average. It is important to not get too excited about shitcoins and their pumps, instead to view the trends over very long periods of time.
In addition to the currencies themselves, crypto is finding it’s way into powering more of our financial system, with stablecoins having a huge year, notably Circle (CRCL) (USDC) being listed on the NYSE. Polymarket using the blockchain Cardano has also had a bumper year with an amazing $2B investment from the owner of the NYSE.
This basket this year will remove the DOGE cryptocurrency and include the Circle stock and Cardano cryptocurrency: BTC-USD, ETH-USD, SOL-USD, ADA-USD, COIN, IBIT, BITO, CRCL.
Arms
Weapons manufacturers have had a big year this year due to all the geopolitical turmoil getting hot, notably the war in the Ukraine still raging and the hot skirmishes all over the Middle East. Tensions are rising all around the globe with Europe deciding to arm up, military buildup in the pacific, India and Pakistan conflicts, but more lately the huge US buildup in the Caribbean is the conflict that might potentially lead to a hot war.
The US has begun focusing a lot more on its own backyard which it considers the Western hemisphere to be, especially by backing Milei via currency swaps to give him an edge in the Argentinian elections. You will notice large parts of Latin America are now looking more pro-USA than in the past and it is my view that militating against Venezuela and to a lesser extent Cuba is a way to tip the balance of power in their favour, and I do believe arms will be a part of that.
All this begets the idea that maybe it is a good idea to have a Latin American theme, however I want to wait a year to see how things stabilise before allocating capital and I want to see what Brazil does with its markets.
This basket will remain the same as last year: XAR, RTX, LMT, NOC, PPA.
Rare Earth Mining
The US has realised it is well behind China when it comes to the production of rare earth minerals, and that that poses a geopolitical risk for its supply chains especially in the technology sector.
To make itself a bigger player in this space and break the production monopoly, it has announced a series of strategic investments in different companies such as MP Materials and Lynas Rare Earths. Furthermore the US is trying to bring Australia closer in terms of Rare Earth mining, and there could be some potential to invest in ASX companies throughout the year. This thematic will continue to play on the geopolitical dynamic of the US attempting to corner China economically.
This basket will remain the same as last year: XME, REMX, MP.
Financial Services
Lots of innovations are happening in the financial services sector. This is a dinosaur in terms of technologies and moves slow, but due to increased competition from decentralised players in the crypto space they have been forced to compete to ensure survival. This has led to some incumbents pursuing aggressive innovations for their usual cadence and upstarts challenging them with their speed, so indeed it is a very hot space to watch, and will hopefully keep outperforming the market in the years to come.
Notably, RobinHood has begun to offer tokenised investments in special purpose vehicles (SVP’s) to private companies, such as OpenAI and SpaceX. For a long time retail investors were locked out of these opportunities but companies like RobinHood are opening this back up, hopefully this will provide more liquidity and signal to the private markets increasing their efficiency and opening up a new frontier of investment.
One of my favourite articles about the current state of the youth and wealth is Financial Nihilism. As jobs and basic saving fail to help people realise the American dream they will turn towards other sources of revenue with big upsides, notably gambling and crypto. Now why I am referencing this in the financial services sector alongside Interactive Brokers (IBKR) is I believe a lot of the smarter ones have begun doing proper stock fundamental and quantitative analysis, and in lieu of being able to afford a Bloomberg terminal they have turned towards Interactive Brokers which offers a much more affordable way to trade stocks, commodities, forex and other global assets. Combine this with more and more people starting funds based on the same reasoning and you have a really large growth in the area of financial services.
This basket will add Interactive Brokers and Wise while keeping all the tickers from 2025: JPM, HOOD, IBKR, WISE.
Nuclear Energy
It has been a huge year for Nuclear energy, largely spurned on by tech companies insatiable appetite for powering their data centers, and that it represents an opportunity for providing base load power without the intermittency of renewables. The safety fears appear to be largely overblown and are often just bought out as boogie men to prevent the reasonable deployment of these power centers.
This year providers of Uranium - Energy Fuels (UUUU) have had one of the biggest years ever, fueled by a huge demand for Uranium to power these fission reactors, and there is no reason to believe this will slow down in 2026, these data centers still need power. In addition to this some major European countries have been de-nuclearising their energy supply much to their extreme detriment, with France now providing large amounts of Europes power as one of the only countries refusing to do this. In lieu of this, I believe it is likely that we see a change of tact here and a re-investment into this space.
In addition to this its good to keep an eye on advances in the sector, and the big one to look at is Oklo (OKLO) who are providing small modular reactor options which are very attractive for data centers who then don’t have to go through a litany of approvals and instead just installs as many of these as they need to power themselves.
This basket will add OKLO while keeping all the tickers from 2025: NLR, UUUU, OKLO.
Power Utilities
To deal with all this power required for data centers and AI, a solid grid needs to be built that can handle demands not just of energy intensive industries but also consumer electrical needs which while not increasing at the rate of growth as industry still represent a democratic constituency that needs to be kept happy politically, and to do that requires routing power to this constituency as cheaply as possible, requiring the grid to keep its promise of routing.
The backlog of requests to connect power transmission lines just keeps growing in the US and it looks like it there is no signs of it abating.
![Figure 5: Completion rates (for requests from 2000-2018) and typical duration to reach commercial operations for projects in the queues. Capacity-weighted completion rates shown in brackets [X%]](https://substackcdn.com/image/fetch/$s_!A7Na!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F031f5044-bdcc-4957-9abf-f6f22a20c594_948x376.png "Figure 5: Completion rates (for requests from 2000-2018) and typical duration to reach commercial operations for projects in the queues. Capacity-weighted completion rates shown in brackets [X%]")
This basket will add PWR while keeping all the tickers from 2025: CEG, GRID, PWR.
Precious Metals
For a long time the US has been using sanctions as a form of geopolitical financial warfare. When this was aimed at smaller countries it was quite effective at starving their economy and thus the country forcing them to come to the table to negotiate a deal. Since the start of the Ukraine war, they begun trying it against Russia in a very serious way, which has caused Russia to develop economic counter weapons which in this case means making themselves less vulnerable to this form of attack.
In addition to this, countries traditionally trading in USD are realising that they too are vulnerable to financial attacks from the US. Tariffs have forced countries to reprice the formerly risk free asset that is US bonds, indeed Moodys recently downgraded this asset to AA.
In addition to this, the US dollar is trading at one of its lowest rates since the start of the year, and the government is considering some quantitative easing after a series of quantitative tightening by the Fed.
All this makes a bullish case for precious metals, often seen as a store of value and a hedge against structural issues with the US dollar. Indeed this is what we have seen this year, with Gold and Silver climbing to new heights.
There is no reason to believe that this trend won’t continue into 2026.
The basket this year will add Silver and Platinum: AAAU, SLV, PLTM.
What are we removing from 2025?
Travel
After the low inflationary period of the middle of the year, it looks like inflation is back on the rise. Unfortunately this means people will have less disposable income which is what generally drives the travel market.
Notably the cruise stocks have done well this year, the thesis holds strong that Boomers will continue to spend their money on high value and easy to access holidays into their retirement, however I do believe that most of this is now priced in, and the Boomers as a cohort aren’t growing. Hotels only gained about 6% on the year, below the portfolios average and interesting contenders like AirBNB look like they are having their own structural issues.
An interesting one to watch was Bookings (BKNG) however upon further digging it seems like the stock is just cannibalising itself with the company performing buybacks that drive up the price of the stock.
I expect this theme to come back when inflation goes back down, which could be next year if the US government can successfully lower energy costs.
Luxury Goods
The luxury goods sector has been tightening its belt lately with lower sales volume primarily due to lower travel between the US and Europe and China and Japan where the bulk of these sales usually occur. This sector had a huge boom post-pandemic when the consumer had a large amount of disposable income however as explained above, inflation is creeping back up causing a lot of people to reconsider their purchases.
One of the best performers in this theme last year was The RealReal (REAL) which has had an amazing comeback from its lows. I believe this shows that demand is there for luxury goods but they need to come down in price first, or the consumer needs more capital to purchase them, so until a big liquidity event happens for consumers I think this sector can be slept on.
Gambling
Although sports gambling might be the closest form of printing money that a business can be, governments have noticed this and imposed huge taxes on these companies. The Big Beautiful Bill notably now only allows gamblers to write off 90% of their losses against their gambling winnings, meaning that you could still lose and owe the government money, this is especially hard when you do large volume bets and could be potentially ruinous for a gambler.
In addition to this, a lot of sports gambling stocks are tied to other forms of gambling such as Caesars (CZR) being tied to their holdings in Las Vegas, which is seeing a massive pullback due to the eye-watering prices being charged to guests.
Another big factor causing less than stellar growth in this industry is the huge rise of Prediction Markets eating their lunch. A large amount of sports betting now happens on these platforms that allow dynamic market based outcomes rather than fixed bookie bets. I absolutely would invest in these platforms if I could, however they are only available on the private markets.
Clean Energy
Unfortunately for the idealistic clean energy just does not look like its a good investable idea in the short term (at least in 2026). The posturing from the US administration has made it clear they don’t support these projects, and the track records in regions like Europe don’t bode well for how quickly this can be done. In addition to this campaigns like Net-Zero in the UK have risen energy costs to eye-watering levels consumers are angry at.
A big disappointment from the clean energy theme has been the inclusion of Enphase (ENPH) which is down 53%. Although there appears to be a lot of chatter about smoothing out renewable energy sources with batteries I have found little evidence that the market thinks this is a viable strategy.
This theme could easily come back if political winds change.
What are we adding in 2026?
Storage
As data center build out continues, most people are focused on GPUs and semiconductors, however there has been an overlooked component integral to this economy that will no doubt have an even bigger supercycle in 2026 due to the sheer size of the models being developed by the AI companies, and the large demand for multimedia based AI (such as video, image and audio).
This component is the storage it takes to do that, and this theme will look at both short term storage (RAM) and long term storage (Disk). Micron (MU) was a major winner this year in the portfolio up 167%, there has been so much demand for their RAM that they have stopped selling to consumers and started dealing exclusively with data centers.
Meanwhile disk storage is having a very strong year, with cloud revenues alone growing around 30% and expected to grow even more as AI becomes more pervasive in this economy.
The basket will include: MU, STX, WDC, SNDK.
Drones
A key area the US appears to be behind compared to China in is the development of drones especially in a military capacity. One of the major drone makers (DJI) is wholly Chinese owned and is now being considered by the US as a Chinese Military Company scuttling its ability to sell to the US market unless they complete an audit by 2025.
The Ukraine war has shown us the value of this technology in military settings, with even middling powers like Iran punching far above their weight with this technology that is cheap to produce.
In light of the US being on the back-foot here, my guess is that they will invest heavily in this area in a state sponsored capacity to bring themselves up to an even footing against China. Indeed they are already ramping up significant defense contracts in this area with no doubt more to come next year.
The basket will include: LHX, TXT, ONDS, AVAV.
LNG Energy
The LNG sector is poised for significant growth in 2026, global demand is surging particularly in Asia due to growing demand data centers, and Europes ongoing shift away from Russian gas. As countries grapple with the energy crunch the AI industrial revolution is formenting, they may turn to LNG, one of the cheapest and least intrusive fuels on the market.
Indeed the data centres in their quest for power have begun setting up LNG turbines onsite, with aerospace players like Boom getting into the turbine game. In this case the theme will include both the supply of LNG gas as well as the turbines for powering them.
The basket will include: GEV, LNG, KMI, SHEL.
Robotics
They say that robotics is the physical expression of AI, and with that in mind its clear to me that 2026 will be a big year for the sector. While quiet for decades, I do believe the pace has advanced enough that we are going to begin to see big uses for these machines this year, a good example of this is Optimus by Tesla which has been holding interesting live events this year and teased prices of about $30k per robot.
The US government knows it is a bit behind compared to their Chinese competitors, with Unitree robotics continuing to stun the world with its robots that can do basketball dunks or kung fu. The truth is we are falling behind here, however all is not lost and lead can still be caught up to, with this in mind there is a big rumour that the US government are going to do a big robotics push (like they did with AI this year), and I don’t want to miss out on this.
The basket will include: TSLA, BOTZ, ROBT, SYM.
Space
Finally the most controversial new theme for 2026. I was not considering putting this here until recently, but there are 2 really big investment reasons that makes this too much to pass up on, and next year I believe there will be enough public market liquidity events that people like me can indeed participate.
The first event to consider is the launch window to Mars, this occurs every 26 months, with the next one happening in November/December of 2026. It is my view that SpaceX and the US as a joint venture are going to take a crack at sending something over there. I doubt it will be manned having said that if you combine the Optimus robots Tesla is building with a SpaceX starship that can be reused while landing safely on Earth (and should have no problem with Mars given its lower gravity). This would represent a huge achievement for mankind with a successful mission displaying dividends by the 2028 election, too much for the current administration to pass up on.
The second is AI datacentres in space. I was originally very skeptical of this, it seems like something that the tech crowd will say just because it combines 2 of their favourite things, AI and Space. Having said that, once I looked at the economics of the idea, its not that bad at all. Consider that currently datacentres are in the political eye due to their increasing demand for power, it is absolutely true that this demand will eventually mean that the average consumers power bill will go up since it is a finite supply, this is whether or not datacentres choose to run their own generators, if you consume more Uranium or LNG, that material will cost more for the general grid suppliers to purchase. In addition to this they need to go through huge amounts of planning and permissions processes, this can often setback building new datacentres by years making it hard to catch up with demand. What if though, you had all the power you need, in space solar power is plentiful, cooling isn’t an issue due to radiators, and latency is largely solved by Starlink technology. Planning only goes through one department, the FAA, who routinely sign off on sending up satellites like this, in fact SpaceX has tripled the number of rocket launches in 2 years, and who knows how much more they will do.
The SpaceX IPO is likely to happen this year, and it is a rare beast where I will want into this IPO immediately.
The basket will include: RKLB and the SpaceX IPO.
Great commentary Will