Core Insights - The year 2026 has begun with notable cross-asset volatility due to rising geopolitical risks, late-cycle monetary uncertainty, and uneven earnings visibility, leading to sharp sector and asset-class rotations rather than broad sell-offs [1] Precious Metals - Gold has traded above $5,300/oz and silver exceeded $110/oz in January, marking one of the strongest monthly starts in decades, with gold up approximately 23% in January, its best monthly performance since the 1980s [2] - In 2025, gold rose 65.2% and silver more than 150%, significantly outperforming global equities, while gold-mining equities gained 166.4%, compared to a 23.1% increase in the FTSE All-World Index [3] Earnings Outlook - Despite macroeconomic stress, the mean earnings-per-share (EPS) estimate for the Zacks S&P 500 Composite indicates a growth of 29.3% in 2026, with capital rotating towards assets with pricing power and strong balance sheets [8] AI Capital Expenditure - Companies are increasing long-term investments in AI data centers, advanced semiconductors, and cloud infrastructure, making this spending a strategic necessity rather than a discretionary upgrade [9][10] Sector Positioning for 2026 - Selective sector allocation is recommended for 2026, focusing on three standout sectors: AI infrastructure and semiconductors, precious metals and gold-linked equities, and energy and critical materials [11] AI Infrastructure & Semiconductors - Capital is concentrating in companies with AI capacity, with NVIDIA and Micron Technology emerging as key beneficiaries, projected to report earnings growth of 57.1% and 298.7% respectively in their upcoming fiscal years [12] Precious Metals & Gold-linked Equities - Gold-mining equities are outperforming bullion due to higher realized prices and disciplined capital expenditure, with Newmont and Barrick projected to report earnings growth of 20.8% and 45% respectively in 2026 [14] Energy & Critical Materials - The demand for electricity and key inputs like copper and nickel is accelerating due to AI data centers, with utilities like NextEra expected to report earnings growth of 7.8% in 2026 [16]

Key Points Memory is becoming a major bottleneck in the AI infrastructure buildout. Both Micron and SK Hynix enjoy pricing power and multiyear revenue visibility for their HBM and advanced DRAM offerings. SK Hynix is already the leader in the HBM market, while Micron is focused on expanding its market share. 10 stocks we like better than Micron Technology › Investors who are looking for high-potential artificial intelligence (AI) stocks often pick well-known semiconductor players such as Nvidia a ...