The 2026 Investing Landscape

What the market can and can't see... AI, satellites, gold, and mortgages... A new AI energy crisis... A critical metal set to soar... The 'bullet to the brain' theory... Big changes, big opportunities...

2026 isn't going to be quite like 2025...

Regular readers know I don't make predictions. So talking about what will happen this year might sound weird coming from me.

But I'm talking about the 2026 investing landscape as it looks right now...

While some 2025 trends might continue this year, many of the year's top stocks likely won't perform anywhere near as well in 2026. You see, the excitement is already baked into their stock prices.

By "baked into the market," I'm talking about stocks like Palantir Technologies (PLTR). It's a great business... but the stock has already soared more than 600% over the past five years and trades at more than 400 times earnings. The cat is out of the bag, and there's likely far more downside than upside at this point.

I'd much rather find the stocks that are where Palantir was five years ago – the ones ready to make an epic, multibagger run and maybe even explode higher this year as the market begins to see their potential.

Let me explain by talking about some specific companies. First, let's look at the stocks that outperformed last year...

According to data compiled by Bloomberg, the following companies were the top 10 performing stocks for 2025 that currently have a $20 billion-plus market cap:

With the artificial-intelligence ("AI") boom ramping up last year, of course several AI-related stocks made the list.

Lumentum (LITE) supplies optical connectivity components that help link graphics processing units – the beating heart of AI infrastructure – together. Western Digital (WDC) and Seagate Technology (STX) make hard disk and solid-state drives for data storage. Micron (MU) makes high-performance memory chips. Bloom Energy (BE) makes fuel cells – the sort of onsite power generation that data centers desperately need.

So far, 2026 has started off by resembling 2025. Since the first of the year, Micron is the No. 1-performing stock above $50 billion in market cap, with Western and Seagate among the top seven.

Still, I find it hard to believe those stocks will perform anywhere near as well this year as they did in 2025. The AI boom trend is already baked into the big winners listed above and many others... but not all of them.

As we'll discuss in a moment, AI is still evolving and creating all kinds of opportunities. As I've said before, like the Internet, AI will leave no business or investor untouched.

Investors were also excited about satellites last year...

AST SpaceMobile (ASTS) and EchoStar (SATS) are plays on the buildout of satellite connectivity.

AST builds satellites. But putting satellites in space is a highly capital-intensive affair. AST continues to burn through cash and needs to keep launching more satellites. To justify its epic 2025 performance, it will have to start generating a lot more revenue and prove itself as a business. That's probably further out in the future than one year, so I figure there's limited – if any – upside left in the stock... and too much downside.

EchoStar is more interesting to me... It transformed itself from a debt-laden, near-bankruptcy firm to a cash-rich success story by selling wireless spectrum to AT&T and SpaceX, with the latter granting EchoStar a large equity stake.

EchoStar's deal with AT&T and SpaceX was potentially very smart because it transitioned the company away from the capital-intensive satellite constellation business to an asset-light business model focused on its Boost Mobile, DISH TV, Sling TV, and Hughes brands. The words "asset-light" are always worth at least a few minutes of my time... and often a whole lot more. I don't pretend to know how any stock will perform this year, and EchoStar has had a great run already... but its business is much more interesting to me as a longer-term investment than AST's.

Next, we have gold and mortgages...

Gold rose roughly 65% in 2025 which sent gold miners like AngloGold Ashanti (AU) soaring. I must admit, contrarian though I may be, I expect gold to keep rising this year – even after its blistering run in 2025 – and I view it as a good longer-term bet. That's why I'm staying long gold stocks in both The Ferris Report and Extreme Value.

Government-sponsored mortgage firms Fannie Mae (FNMA) and Freddie Mac (FMCC) were put under government conservatorship after the financial crisis blew up the housing and mortgage industries in 2008. So it might sound surprising to find them on the top-performing list for 2025.

The two stocks soared amidst the belief that President Donald Trump's administration would end their conservatorship and privatize them. Hedge-fund mogul Bill Ackman has led the charge on these two stocks, believing that privatizing them will unlock massive value.

Frannie Mae and Freddie Mac show the confidence folks have in the Trump administration's ability to move the needle in the industries it favors. In my December 19 Digest, I made it clear that this will become a major trend over the next year or more.

Ackman thinks Fannie and Freddie could each trade in the $40s. Today, they're around $10 to $11 per share. If Ackman is right, there's a lot more upside left in these stocks, even though they've already done very well.

All of this leads me to the question...

What isn't already baked into the market for 2026?...

Said another way, what stocks look like they're about to perform a lot better this year than last?

In the December issue of The Ferris Report, I offered one answer to that question: an energy crisis nobody's talking about.

The crisis centers around data centers' unique power needs, and what I expect to happen if the power grid shuts down for 48 hours or more in key areas like Northern Virginia, Atlanta, Seattle, and other places with lots of data centers.

I can't give too much away out of fairness to Ferris Report subscribers, but I recommended two stocks that provide critical energy products for data centers. I believe these names will do well even if I'm wrong about a coming crisis... and they'll soar if I'm right.

These stocks have underperformed the S&P 500 Index over the past couple of years, so there's plenty of upside potential. This energy crisis and its solution is my biggest new idea for 2026.

Ferris Report subscribers can find the December issue right here. And if you don't already have a subscription to The Ferris Report, you can learn more here.

Overall, energy is a big bottleneck for data centers...

Because of the massive amount of energy data centers need, builders are becoming more interested in generating their own power. They can build their own power plants faster than they can get connected to the energy grid in many instances.

For example, it can take seven years or more to get a new grid connection in Northern Virginia – which has the highest concentration of data centers in the world. But it's possible to build new on-site power generation in half that time.

Natural gas will likely become an important energy source for these centers in 2026. It's considered the cleanest burning fossil fuel, and it's widely available in the U.S.

The new uptime standard for data centers is 99.999%. In short, these services can be down for no more than five minutes and 26 seconds per year. Renewable sources simply aren't reliable enough to fulfill that mission as primary or backup power.

Natural gas was volatile (as always) in 2025, but overall, it rose around 1.5% for the year. But that's not the whole story. From its lowest levels in 2023 to its highest prices last year, it rose as much as 234%.

Natural gas giant EQT (EQT) has risen more than 50% (including dividends) since my March 2024 Ferris Report recommendation, compared with a 32% rise in the S&P 500 during the same period.

So natural gas demand seems to be baked into the market. But I don't think the trend has run its course yet. That's why we're staying long on EQT in The Ferris Report. If the crisis I expect in data-center power happens this year, I expect EQT and other gas stocks to benefit.

The data-center energy bottleneck isn't just about fuel...

It's about gas turbines, too. It takes a lot of investment, time, and manufacturing capacity to build these big, complex gas turbines.

GE Vernova (GEV), Siemens (SIEGY), and Mitsubishi Heavy Industries (MHVYF) account for about two-thirds of global turbine-making capacity. All three have big order backlogs stretching years into the future.

That's why all three of their stocks have outperformed the S&P 500 over the past couple of years. The backlogs are well known, unlike the impending energy crisis I wrote about last month in The Ferris Report. This part of the equation is well known and appears to be priced into the market.

Nuclear power generation and uranium stocks have also benefited from the AI energy trend. So perhaps I should add them to the baked-in list. But you never know how far a trend will go, and I believe we're in the midst of a longer-term bull market throughout the energy complex. It'll be volatile, but I think there's more upside ahead.

Another trend that did well last year but hasn't yet run its course is in one of the most important metals...

And I'm not talking about silver or gold...

A world that runs on electricity also runs on copper, making it perhaps the most important of all the base metals. Copper is used in construction, cars (especially electric vehicles), computers, every electric device you can name, and data centers. Everywhere there's electricity, there's copper.

While volatile throughout the year, copper rose 41% in 2025... propelling copper stocks higher. The copper stock in our Extreme Value Ultimate Commodity Hypercycle Portfolio (exclusive for Premier subscribers) rose 63% last year for a total return of 112% since our March 2023 recommendation.

But I suspect there's more upside in copper and copper stocks from here...

Right now, copper sells for around $5.80 per pound. I would guess the price that incentivizes new copper mining capacity is somewhere between $5.50 and $6.50 per pound.

But as the very smart folks at Newfoundland-based royalty company Altius Minerals (ALS.TO) taught me a few years ago, the market doesn't instantly respond once that price is reached.

Their research shows that folks who finance new mines usually require double the incentivization price before they throw big amounts of capital into building new supply. That's $11 to $13 per pound of copper. Whether it takes one year to get there or five, if copper goes that high, copper stocks will soar.

In other words, there's good reason to expect further upside in copper and copper equities.

After I looked at the biggest gainers of 2025, I couldn't help wondering about the year's big losers...

According to data compiled by Bloomberg, seven U.S.-traded stocks with a current market cap of $10 billion-plus fell 40% or more last year:

I won't go through them all, but Gartner (IT) appears to be a victim of AI. Though the company has positioned itself as "the world authority on AI," the market seems to believe its insight and advice can be replaced by AI.

Overall, as I look at the list of losers, I'm reminded of something I heard many years ago at a Grant's Interest Rate Observer conference in New York.

One of the speakers was discussing what stocks his firm likes to sell short. He said they didn't want to short companies with lots of niggling problems because they could probably be fixed with proper management.

He preferred to short a stock with "one bullet to the brain" – a single problem that would destroy its business, which didn't appear to be fixable by management.

It's a decent way to begin assessing this list of losers as potential contrarian buys or even as shorts. Stocks down this much are usually getting whacked for a good reason. If the reason is one big bullet to the head, there could be plenty more downside ahead. If not, maybe they're good contrarian longs.

The bullet to the head theory is also interesting because it's the flip side of something legendary investor Warren Buffett wrote in his 1989 shareholder letter:

[A] great investment opportunity occurs when a marvelous business encounters a one-time huge, but solvable, problem as was the case many years back at both American Express and GEICO.

Figuring out if a big problem is a bullet to the head or solvable is a big job. But if you get it right, there's probably a big return in it for you.

However, it's worth noting the next sentence Buffett wrote in the 1989 letter...

'Overall, however, we've done better by avoiding dragons than by slaying them...'

Amen to that. In both Extreme Value and The Ferris Report, we focus on businesses that are running well and aren't beset by big problems.

That said, Fiserv (FISV) seems like it's worth thinking about...

Fiserv provides software for banks that facilitates online banking, online bill pay, and debit, credit, ATM, and prepaid card processing. The business is deeply embedded in the financial infrastructure.

Fiserv has been valued like a "marvelous business" for years. But its stock fell nearly 50% in three trading sessions in October after it issued a disappointing third-quarter earnings report, drastically cut earnings guidance, and admitted that it had been underinvesting in the business and charging too much for its services.

Now, Fiserv is mired in a turnaround that's expected to take multiple quarters. It'll have to invest heavily and work hard to satisfy customers.

At least, that's the popular narrative. Another way to look at it is that the new CEO gets to start out with a drastically lower stock price, providing him with plenty of upside potential. And he can blame the company's problems on previous management, giving him more leeway to right the ship.

For now, none of Fiserv's problems seem like a bullet to the brain. Whether it'll recover to a much higher valuation is another question.

This isn't a recommendation. It's just an example of how I'll be thinking about these stocks as I assess each one for a possible recommendation.

It's also a way of saying that I won't be taking anything for granted in 2026. AI has changed the landscape for businesses, giving me reason to go back and look at a wide variety of stocks from a whole new perspective.

In short, 2026 is setting up to be an exciting year. While some trends will surely continue, we're also seeing big technological changes... potential crises... and massive new opportunities.

New 52-week highs (as of 1/8/26): Agnico Eagle Mines (AEM), Atmus Filtration Technologies (ATMU), Alpha Architect 1-3 Month Box Fund (BOXX), Pacer U.S. Cash Cows 100 Fund (COWZ), WisdomTree Japan SmallCap Dividend Fund (DFJ), Enel (ENLAY), iShares MSCI Germany Fund (EWG), Expeditors International of Washington (EXPD), Cambria Emerging Shareholder Yield Fund (EYLD), Franco-Nevada (FNV), Cambria Foreign Shareholder Yield Fund (FYLD), Alphabet (GOOGL), iRhythm Technologies (IRTC), Kinross Gold (KGC), L3Harris Technologies (LHX), Mueller Industries (MLI), Merck (MRK), New Gold (NGD), New York Times (NYT), Invesco Oil & Gas Services Fund (PXJ), Snap-on (SNA), and Valero Energy (VLO).

In today's mailbag, thoughts on our description of Nicolás Maduro from earlier this week... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.

"Happy New Year Corey. In your January 5th Digest you referred to the U.S. action in Venezuela as 'Taking out a president', and then [Tuesday] night you referred to Maduro as the 'now-former Venezuelan President'. When you refer to him as the 'president' or the former 'President', upon which election do you consider him as having earned the title of President of Venezuela? I'm no expert, but my recollection was that he claimed to be the president after a 2018 election but: a) Venezuela's legislature voted to declare the claimed election victory illegitimate; and b) the U.S. and many other countries refused to recognize him as the president. If I'm right, it is possible some of your readers may be inclined to believe the narrative that suggests President Trump took out a legitimately elected leader of a foreign country (which I do not think is accurate).

"Keep up the good work and God bless." – Subscriber Scott P.

Corey McLaughlin comment: I get your points, but in telling what happened and naming Maduro, we were less interested in being the arbiter of the legitimacy of a presidency and Trump's decision than we are discussing the economic impacts of Maduro no longer being the head of the country... which is what he was, and called himself, at least.

Good investing,

Dan Ferris
Medford, Oregon
January 9, 2026