Goldman Sachs takes stock of the top ten investment themes of 2026: "The Rise of China" is on the list.

As 2025 comes to an end and 2026 approaches, Goldman Sachs industry analysts are currently focusing on several themes worth watching in the coming year. In a recent research report released by Goldman Sachs at the turn of the year, the U.S. stock market declined in trading on the last day of the year (the last day of 2025), but is still expected to rise by nearly 17% for the full year of 2025. Investors last year digested a lot of information, from tariffs to AI, from geopolitical risks to economic stimulus policies. Since the brief bursting of the tech bubble in 2021, the market's performance has almost been the same every year - a continuous rise. Can this lay the foundation for a similar trend in 2026? Goldman Sachs states that 2025 was an especially interesting year as it was characterized by three words: Noise, Quiet, and Transition. Looking ahead to 2026, these three characteristics may continue: Noise: Second year presidential administrations are often less 'noisy', but with the midterm elections looming, this could bring about political changes at state and congressional levels. Additionally, the U.S. Supreme Court plans to rule on a series of cases that may have market impact, including the legality of the Trump administration's tariffs. Quiet: Goldman Sachs believes steady is the most appropriate word to describe the economic and stock price forecasts for 2026. Economically, the U.S. GDP growth rate for 2026 is expected to be 2.6%, higher than the 2.1% in 2025 and slightly lower than the pace in 2024. This is driven by tariff reductions, economic stimulus, and AI-driven productivity improvements contributing to sustained robust economic growth. In terms of corporate earnings, the earnings per share growth rate for the S&P 500 index is expected to increase from 10.5% in 2025 to 12.1% in 2026. As for the target level of the S&P 500 index, Goldman Sachs predicts it will reach 7600 by the end of 2026, representing an increase of about 11% from current levels. While this rate of return is lower than the 16.8% increase in 2025, it still represents a strong return for the stock market. Transition: The transition in 2026 may feature a more pronounced shift towards a broader group benefiting from AI. In 2025, almost all major stock markets outperformed the U.S. in local currency and US dollar terms. Looking ahead to the next year, Goldman Sachs recommends investing in several cyclical sectors, including Russell 2000 Index components, non-residential construction stocks, consumer stocks geared toward middle-income consumers, and AI productivity benefit stocks - companies that can reduce costs or increase revenues by adopting AI-driven technologies and solutions. Here are the top ten investment themes for 2026 mentioned in the Goldman Sachs report: 1. AI and Power The theme of AI infrastructure is showing signs of transitioning to a new stage. Since the summer, the stock prices of many established leaders like Nvidia, Microsoft, and Amazon have stagnated, while newer companies like Qualcomm are actively expanding, and AI 'winners' like Google are starting to emerge. Stock prices of storage manufacturers (e.g. Micron) and connector companies (e.g. Amphenol and TE Connectivity) have soared. The power sector in AI infrastructure construction is also transitioning: While gas turbine supplier GE Vernova continues to rise, companies responsible for installing these equipment (such as Quanta Services and EME) are thriving in the face of market and on-site service scarcity. However, the rise in utility stocks has stalled. In a report in November, Goldman Sachs delved into the next stage of AI trading, including companies that could become more efficient by implementing AI-driven tools. 2. Drug Development In the GLP-1 field, the transition may be even more significant. While Lilly's stock price continues to outperform the market, Novo Nordisk's stock price has almost halved in 2025 due to a double headwind of price and volume, leading to a 33% downward revision in earnings per share expectations for 2026. Goldman Sachs expects this shift to extend to new weight-loss products awaiting approval in 2026. With numerous drugs and therapies poised for approval in the coming year, Goldman also observes a transition from obesity drugs to a Cardiology Renaissance. 3. Blurring Boundaries Between Physical Store Sales, Online Commerce, and Advertising Goldman Sachs has emphasized the increasing blurring of boundaries between physical store sales, online commerce, and advertising in several previous outlook reports. Goldman strategy analyst Eric Sheridan has long focused on this area and in the "Internet: 2026 Top Industry Themes and Key Stock Outlook" report, pointed out that e-commerce platforms are creating profitability opportunities through advertising agreements. Another strategy analyst, Kate McShane, highlights how retailers are expanding into diversified revenue channels such as media, memberships, and e-commerce, and emphasizes the introduction of delivery speed, value, and 'smart retail' solutions that will reshape the industry landscape in the coming year. 4. China Rising Goldman economists predict that despite the intensification of tariff barriers, China will still achieve faster-than-expected growth through technological progress and sustained export advantages. The impact of China's economic recovery on global trade and the tech landscape will be closely watched in the coming year. 5. Productivity-Driven Profit Growth The Goldman Sachs team points out that with technology-driven productivity gains supporting growth in the coming year, there is a possibility of 'jobless expansion'. However, given the ongoing labor shortage due to continued immigration restrictions, such productivity gains may be necessary. Ultimately, productivity improvement may be key in offsetting the combined effects of aging populations and declining birth rates. 6. Alternative Investments In 2025, the private credit market surpassed private equity, continuing to attract retail funds. Goldman strategy analysts have noted the favorable positions of brokers such as Coinbase and Robinhood in expanding markets like cryptocurrencies, stable coins, and prediction markets. Additionally, gold investments are currently gaining momentum. 7. Militarization Evolution In the U.S., the Space Force is actively absorbing innovative forces, as demonstrated by the contract awarded for a new satellite tracking system in December last year, and companies with native drone and satellite technology like AeroVironment (AVAV) and Rocket Lab Corporation (RKLB) may gain a significant advantage. Meanwhile, Europe is rebooting its militarization process, with an estimated investment of up to $160 billion in the next five years just to catch up with potential Russian advances. 8. Humanoid Robotics & Automation by Siasun Robot & Automation and Autonomous Vehicles As technology advances, the production capabilities of hardware that can simulate daily activities are also improving. In a report released by Goldman Sachs in October, the team evaluated the potential drivers of profit growth for leading industrial technology companies like Tesla from the development of humanoid Siasun Robot & Automation. Goldman Sachs has also conducted on-site inspections of the Siasun Robot & Automation ecosystem in China, believing that the Chinese Siasun Robot & Automation supply chain is preparing optimistically in advance for capacity, waiting for actual orders. Additionally, China is also leading the trend in the field of autonomous driving, with the Chinese market for autonomous taxis expected to reach $47 billion by 2035. 9. Nuclear Energy Revival and Rise of Rare Earth Metals In the past few decades, three nuclear power plant accidents - Three Mile Island, Chernobyl, and Fukushima - had stagnated the development of nuclear energy. However, strong demand is now driving a nuclear energy revival, with the AI revolution's increasing demand for energy (especially clean energy) pushing nuclear energy back to the forefront. Rare earth metals are becoming key components in the tech industry, which is currently still dominated by Chinese resources. 10. Policy Uncertainty Finally, the direction of policies always remains a significant market theme. Goldman Sachs believes that as we enter 2026, the impact of policies on the market may be more pronounced than usual (as seen in 2025). Why? In terms of monetary policy, discussions around the Federal Reserve's next steps, leadership changes within the Federal Reserve, and the broader influence of U.S. monetary policy will be key topics dominating the market at least in the first half of the year. Internal divisions within the Federal Reserve still exist - the minutes from the December meeting showed that most FOMC members believe that further rate cuts are likely in the future, but some members believe that policy will remain unchanged for some time. As 2026 approaches, Goldman Sachs traders are closely monitoring a series of catalysts that may affect market trends, including: - Anticipated Supreme Court rulings on the legality of the Trump administration's tariffs - Federal Reserve meetings in January and March (and beyond) - Appointment of a new Federal Reserve Chair - U.S. midterm elections in November 2026 - World Cup and Winter Olympics events Goldman Sachs finally reminds that one key point to keep in mind when looking ahead to 2026 is that current stock market valuations are at their highest levels since the late 1990s. Note: Graph of valuation changes over the past century A crucial unanswered question is: Can the artificial intelligence wave bring profit growth like the electric motor and software hardware revolutions? Note: Ratios of technology investments to GDP in three technological revolutions This article was reprinted from "Caishang Society" by GMTEight edited: Xu Wenqiang.