Why SPY, QQQ, SMH Could Be Big ETF Winners In 2026 - Apple (NASDAQ:AAPL), iShares Core S&P 500 ETF (ARCA:IVV)

Core Viewpoint - Wells Fargo projects the S&P 500 could reach 7,400-7,600 in 2026, indicating an approximate 11% return from current levels [1][2] Market Outlook - The bank anticipates "solid" market returns in 2026 driven by consumer spending, investments in artificial intelligence, and potential deregulation, despite expected volatility [2] - Analysts were predominantly bullish heading into 2025, with forecasts suggesting the S&P 500 would end 2025 around 6,500, which has already been surpassed [3] Performance Metrics - The S&P 500 has increased by 17% in 2025, marking a trend of double-digit gains for three consecutive years following rallies of over 20% in 2023 and 2024 [4] - SPY has seen a loss of approximately $4.8 billion in flows, while VOO gained $122 billion and IVV added $30 billion, indicating a shift towards lower-cost, long-term S&P vehicles [4] ETF Insights - The bullish forecast for 2026 is expected to positively impact SPY, VOO, and IVV, despite some discrepancies in fund flows [5] - For investors seeking alternatives, the Invesco S&P 500 Equal Weight ETF (RSP) may perform well if underperforming stocks in the S&P 500 catch up [5] Thematic Investments - Wells Fargo highlights AI investments as a key growth driver, suggesting thematic ETFs should be revisited for 2026 [6] - The Invesco QQQ Trust (QQQ) is positioned to benefit from major AI market leaders, while semiconductor ETFs like SOXX and SMH are expected to perform strongly due to their importance in AI infrastructure [6] Investment Strategy - Thematic ETFs are generally more volatile, and pairing them with broad-market funds like SPY, VOO, or IVV can provide a balanced investment approach [7] - Broad-market ETFs are recommended as a cost-effective way to engage in a strong multi-year rally, while thematic exposure can enhance growth potential [8]