SPOTLIGHT
2026 Equity Sector Performance Outlook
As part of Fidelity's market outlook for financial advisors, discover the best investment ideas from our sector portfolio managers and learn how they have positioned their portfolios for the coming year.
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AI spending boom transforming many sectors
Massive corporate capital spending on artificial intelligence capabilities is expected to continue in 2026, and like past technological transformations, the stock prices of AI-focused technology companies have led the spending boom. Still, the implications of AI spread across multiple sectors beyond information technology, and our sector portfolio managers have positioned their portfolios accordingly. For example, in communication services, AI is transforming the video gaming business. In utilities, demand for power to support the build-out of AI-related data centers is fueling expectations for growth among well-positioned power providers. In industrials, natural gas turbine manufacturers are seeing an increase in demand to help power providers create electricity.
Beyond AI-related growth themes, an accelerating pace of innovation in the biotech industry has led to potentially rewarding investments among companies with breakthrough products to address unmet medical needs. Favorable supply-and-demand conditions in the senior housing industry have created compelling investments among real estate investment trusts. Meanwhile, a return to historical consumption trends for alcoholic beverages among younger and low- and middle-income households could result in growth potential for distillers and vintners with strong brand recognition and international exposure.
These are just a few of the investment themes and trends our sector leaders are optimistic about in 2026. Read on to learn more about Fidelity sector managers’ highest-conviction ideas across the 11 equity sectors in 2026.
Explore the 11 equity sector outlooks
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Views expressed are as of the date indicated, based on the information available at that time, and may change based on market and other conditions. Unless otherwise noted, the opinions provided are those of the authors and not necessarily those of Fidelity Investments or its affiliates. Fidelity does not assume any duty to update any of the information.
References to specific investment themes are for illustrative purposes only and should not be construed as recommendations or investment advice. Investment decisions should be based on an individual's own goals, time horizon, and tolerance for risk. This piece may contain assumptions that are "forward-looking statements," which are based on certain assumptions of future events. Actual events are difficult to predict and may differ from those assumed. There can be no assurance that forward-looking statements will materialize or that actual returns or results will not be materially different from those described here.
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Investing involves risk, including risk of loss.
Stock markets are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments.
Because of its narrow focus, sector investing tends to be more volatile than investments that diversify across many sectors and companies. Sector investing is also subject to the additional risks associated with its particular industry.
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