Executive Summary
- 1Rare convergence of forces: unprecedented technological investment, elevated but increasingly justified valuations, and a policy/geopolitical backdrop producing ongoing volatility.
- 2AI has moved from theme to infrastructure: capital-intensive buildout influencing productivity, corporate strategy, and national priorities—not just a speculative idea.
- 32026 rewards selectivity: the year ahead favors structure and thoughtful portfolio construction, particularly across innovation-driven sectors where long-term demand is becoming clearer.
Overview
- •AI infrastructure capex at historic levels—compute, data centers, networking, energy investments accelerating
- •Valuations elevated but increasingly supported by real revenues, committed capital, and measurable adoption
- •Risk has shifted from "is AI real?" to "who captures the economics, at what price, over what time horizon?"
- •Volatility expected to remain elevated—a byproduct of rapid technological change amid tighter financial conditions
- •U.S. innovation advantage remains intact—concentration of talent, capital, and research institutions unmatched
- •Emerging themes: Healthcare/Lifesciences, Space Technology, Energy/Nuclear, Advanced Materials
Investment Themes for 2026
Policy & Portfolio
Closing Perspective
"2026 is unlikely to be a year of smooth, linear returns. It is far more likely to reward discipline, selectivity, and structural thinking. AI and innovation remain powerful forces, but outcomes will be uneven. In our view, the opportunity lies not in chasing narratives, but in building portfolios designed to compound through volatility over time."