As 2025 concludes and 2026 begins, industry analysts at Goldman Sachs are currently focusing on several key themes worth watching in the coming year. A recent research report released by the firm at the turn of the year noted that while US stocks declined in trading last Wednesday, the final day of 2025, they were still on track for a nearly 17% gain for the full year. Over the past year, investors digested a multitude of information, ranging from tariffs and AI to geopolitical risks and economic stimulus policies. Since the brief tech bubble burst in 2021, the market's performance has been remarkably consistent year after year—a persistent upward trend. The question remains whether this sets the stage for a similar trajectory in 2026. Goldman Sachs suggests that 2025 was an exceptionally interesting year, characterized by three distinct themes: Noise, Quiet, and Transition. Looking ahead to 2026, these three characteristics are likely to persist: Noise: Presidents often tend to be less "noisy" in their second year in office, but with midterm elections approaching, this could bring political changes at the state and congressional levels. Additionally, the US Supreme Court is scheduled to rule on a series of cases that could have market implications, including the legality of tariffs imposed during the Trump administration. Quiet: Goldman Sachs believes "smooth" is the most apt term to describe the economic and stock price forecasts for 2026. Economically, US GDP growth is projected at 2.6% for 2026, up from 2.1% in 2025 but slightly below the growth rate of 2024, as tariff reductions, economic stimulus, and AI-driven productivity gains collectively fuel sustained, robust growth. Regarding corporate earnings, the earnings per share growth rate for the S&P 500 is expected to increase from 10.5% in 2025 to 12.1% in 2026. As for the S&P 500 target level, Goldman Sachs predicts it will reach 7600 by the end of 2026, representing an approximate 11% gain from current levels. While this return is lower than the 16.8% surge seen in 2025, it would still constitute a strong performance for the stock market. Transition: The transition in 2026 may be characterized by a more pronounced shift towards a broader set of AI beneficiaries. In 2025, nearly all major stock markets outperformed the US, whether measured in local currencies or US dollars. Looking ahead to the coming year, the Goldman Sachs team recommends investing in several pro-cyclical areas, including constituents of the Russell 2000 index, non-residential construction stocks, consumer stocks targeting middle-income consumers, and AI productivity beneficiaries—companies that can reduce costs or increase revenue by adopting AI-driven technologies and solutions. The following are the top ten investment themes for 2026 highlighted in the Goldman Sachs report: ① AI & Electricity The AI infrastructure theme is showing signs of transitioning to a new phase. Since the summer, share price gains for many previously reliable leaders—Nvidia, Microsoft, Amazon—have stalled. Meanwhile, emerging companies like Qualcomm are actively positioning themselves, and "winners" in the AI field, such as Google, are beginning to stand out. Memory producers like Micron and connector companies like Amphenol and TE Connectivity have seen their stock prices soar. The power sector within AI infrastructure is also undergoing a transformation: while gas turbine supplier GE Vernova continues to show strength, and companies responsible for installing this equipment, like Quanta Services and EME, continue to thrive amid scarcity in both market and field services, the rally in utility stocks has stalled. Goldman Sachs explored the next phase of AI trades in a November report, including companies that might become more efficient by implementing AI-driven tools. ② Pharmaceutical R&D In the GLP-1 sector, the transition dynamic is perhaps even more pronounced. Eli Lilly's stock continues to outperform the broader market, but Novo Nordisk's share price has nearly halved in 2025 due to headwinds in both pricing and volume, leading to a 33% downward revision in 2026 EPS expectations. Goldman Sachs expects this transition to extend to new weight-loss products awaiting approval in 2026. Furthermore, with numerous drugs and therapies expected to gain approval in the coming year, Goldman also observes a transition from obesity drugs towards a "Cardiology Renaissance." ③ Blurring Lines Between Physical Retail, E-commerce, and Advertising Goldman Sachs has previously emphasized the increasingly blurry lines between physical retail, e-commerce, and advertising in multiple outlook reports. Strategist Eric Sheridan, who has long focused on this area, noted in his "Internet: Top 10 Industry Themes and Key Stock Outlook for 2026" that e-commerce platforms are creating profit opportunities through advertising marketing agreements. Another strategist, Kate McShane, pointed out that retailers are continuously expanding diversified revenue channels such as media, membership programs, and e-commerce. She emphasized that delivery speed, value, and the introduction of "agent commerce" solutions will reshape the industry landscape in the coming year. ④ China Rising Goldman Sachs economists predict that even in an environment of heightened tariff barriers, China will achieve growth exceeding expectations, driven by technological advancements and sustained export advantages. The impact of China's economic recovery on global trade and the technology landscape will be closely monitored in the year ahead. ⑤ Productivity-Driven Profit Growth The Goldman Sachs team points out that as technology-driven productivity gains support growth in the coming year, the possibility of "jobless expansion" exists. However, such productivity enhancements may be necessary in the face of a shrinking labor force due to continued restrictions on immigration. Ultimately, productivity gains could be key to offsetting the combined effects of an aging population and declining birth rates. ⑥ Alternative Investments In 2025, the private credit market surpassed private equity, continuing to attract inflows of retail capital. Goldman Sachs strategists have previously noted the advantageous position of brokers like Coinbase and Robinhood in expanding markets such as cryptocurrencies, stablecoins, and prediction markets. Additionally, gold investment is currently gaining significant traction. ⑦ Militarization Evolution In the United States, the Space Force is actively incorporating innovative capabilities, as evidenced by contracts awarded last December for new satellite tracking systems. Companies with inherent expertise in drone and satellite technology—such as AeroVironment (AVAV) and Rocket Lab (RKLB)—may hold a significant advantage. Meanwhile, the European continent is restarting its militarization process, potentially requiring investments of up to $160 billion over the next five years just to keep pace with Russia. ⑧ Humanoid Robots & Autonomous Vehicles As technology advances, so does the production capacity for hardware capable of simulating everyday activities. In an October report, the Goldman Sachs team assessed the potential for humanoid robot development to drive profit growth for leading industrial tech companies like Tesla. The team has also conducted on-the-ground inspections of China's robotics ecosystem, believing that the Chinese humanoid robot supply chain is proactively and optimistically preparing capacity in anticipation of concrete orders. Furthermore, China is also leading the trend in autonomous driving, with the country's robotaxi market size projected to reach $47 billion by 2035. ⑨ Nuclear Revival & Rare Earths Rise Three nuclear power plant accidents—Three Mile Island, Chernobyl, and Fukushima—stalled nuclear energy development for decades. However, robust demand is now fostering a nuclear revival, as the AI revolution's increasing thirst for energy, particularly clean energy, is pushing nuclear power back to the forefront. Rare earth metals are becoming critical components in the technology sector—a domain currently still dominated by Chinese resources. ⑩ Policy Uncertainty Finally, policy direction remains a major market theme. Goldman Sachs believes that as we enter 2026, the impact of policy on markets could be more pronounced than usual, as seen in 2025. Why? On the monetary policy front, discussions surrounding the Federal Reserve's next moves, the upcoming leadership transition at the Fed, and its broader implications for US monetary policy will be key market-driving topics, at least in the first half of the year. Divisions within the Fed persist—the December meeting minutes indicated that a majority of FOMC members anticipate further rate cuts, while some believe policy will remain unchanged for a period. As 2026 unfolds, Goldman Sachs traders are also closely monitoring a series of catalysts that could influence market direction, including: the Supreme Court's anticipated ruling on the legality of the Trump administration's tariff system; the Fed's January and March meetings (and subsequent ones, of course); the appointment of a new Fed Chair; the US midterm elections in November 2026; and the World Cup and Winter Olympics events. Goldman Sachs concludes with a reminder for looking ahead to 2026: it is crucial to remember that current stock market valuations have reached their highest level since the late 1990s. Note: Chart showing valuation changes over the past 100+ years. A key question that remains unanswered is: Can the AI wave drive profit growth akin to the electric motor and the software/hardware revolutions? Note: Chart showing tech investment as a percentage of GDP during three technological revolutions.