Where To Invest in 2026: Insights From eToro’s Market Experts

We asked our analysts to consider the investment trends which could come into play in 2026 and predict which types of assets look set to benefit from changes in market dynamics. These are the regions, sectors, and individual stocks they forecast will come out on top over the next 12 months.

Mati Ben Alon’s Top Pick for 2026

US housing is one of the most cyclical areas of the market, and heading into 2026 it sits at an interesting intersection of policy, supply, and delayed demand. The SPDR S&P Homebuilders ETF (XHB) offers broad exposure to this turning point.

Rate Cycle Inflection: Housing is highly sensitive to interest rates. If the Federal Reserve continues its rate-cutting cycle, even at a measured pace, mortgage affordability improves at the margin. Historically, housing activity responds not when rates are low, but when rate uncertainty declines, creating room for sentiment and volumes to recover.

Supply-Demand Imbalance: The US continues to face a structural shortage of housing after years of underbuilding. Household formation and demographic demand remain intact, while inventory stays constrained. This imbalance means that even modest improvements in affordability can translate into meaningful activity.

Cyclical Opportunity: Homebuilding stocks often reprice ahead of visible improvements in housing data. Current valuations reflect caution rather than normalization, offering exposure before the cycle fully turns.

Risk Factors: If rate cuts are delayed or inflation resurfaces, affordability pressures could persist. A broader economic slowdown may also weigh on demand. Still, Mati believes the current setup reflects cyclical hesitation rather than excess.

Mati Ben Alon, Editor-in-Chief, eToro

Lale Akoner’s Top Pick for 2026

Lale Akoner believes PNC Financial Services Group offers a rare combination for 2026: resilient margins, improving fee momentum, stabilising credit and rising capital returns. All at a time when many investors are still pricing regional banks through an outdated rate-cut lens.

Interest Rate Dynamics: Into 2026, the backdrop for regional banks is improving as short-term rates are expected to fall faster than longer-term rates. This dynamic creates a steeper yield curve, which favours traditional lenders by lowering what banks pay on deposits while keeping loan yields relatively stable. At the same time, many older loans written during the ultra-low-rate years are rolling off and being replaced with higher-yielding assets.

Balance Sheet Strength: PNC enters 2026 with one of the most resilient balance sheets in the sector. Management has reiterated around $1bn of standalone net interest income growth in 2026, or roughly 7%, driven by fixed-rate asset repricing, easing deposit costs and modest loan growth.

At the same time, cyclical momentum is turning more supportive. Capital markets activity is recovering, particularly in the middle market, where PNC has a strong franchise. Treasury management remains a key differentiator, delivering consistent fee growth and helping diversify revenues away from pure lending.

Growth, Capital Returns and Optionality: The pending FirstBank acquisition, expected to close in early 2026, expands PNC into faster-growing Western markets and is expected to be earnings-neutral initially before becoming accretive. With strong capital ratios and regulatory buffers at minimum levels, PNC also has ample capacity to return capital through dividends and buybacks.

Risk Factors: Some analysis has noted that PNC’s nonperforming loans (NPL) ratio has been higher than some of its peers, potentially indicating a riskier loan portfolio compared to competitors.

Lale Akoner, Asset Management Analyst and Market Strategist, eToro

Javier Molina’s Top Pick for 2026

Ethereum (ETH) remains at the center of digital market transformation, standing out as the asset that could outperform within the crypto and digital asset universe.

Attractive Valuation: despite recent corrections across the market, ethereum trades at a relative discount considering its on-chain activity, network revenues, and staking yield. With more than 35 million ETH staked and sustained net deflationary issuance, ETH continues to act as both a productive and scarce asset in the digital economy.

Growth Outlook: Ethereum’s ecosystem continues expanding beyond decentralized finance (DeFi) into real-world asset tokenization and institutional infrastructure. The integration of stablecoins, layer-2 scalability, and tokenized funds positions Ethereum as the backbone of digital capital markets. Long-term fundamentals remain strong, supported by increasing institutional adoption and network monetization capacity.

Transition Leader: Ethereum leads the convergence between traditional finance and blockchain infrastructure. The emergence of tokenized funds, stablecoin settlement on Ethereum, and the alignment with global regulatory frameworks reinforce its role as the protocol of reference for financial digitalization.

Risk Factors: In the short term, ethereum remains exposed to liquidity cycles, macroeconomic tightening, and investor risk aversion. Additionally, network competition from other scalable chains could pressure its relative valuation. Nevertheless, the structural narrative (tokenization, real yield, and institutional integration) continues intact, defining Ethereum as a long-duration asset in the digital era.

Javier Molina, Capital markets & Digital Assets Analyst, eToro

Neža Molk’s Top Pick for 2026

Neža believes the financial sector could perform well in 2026 as earnings across banks, payment companies, and diversified financial institutions remain supported by ongoing economic activity. The Financial Select Sector Index offers exposure to leading U.S. financial companies, including banks, insurers, and payment networks that sit at the core of the global financial system.

Hidden Strength: While technology and AI often dominate investor attention, financial companies can be overlooked despite their importance to the economy. Many of the index’s largest holdings, such as JPMorgan Chase & Co. (JPM), Bank of America Corp (BAC), and Wells Fargo & Co (WFC), benefit from scale, strong balance sheets, and recurring revenues. This can result in parts of the sector being attractively valued relative to long term earnings power.

Macro Outlook: Financial stocks tend to perform best when economic activity remains resilient. Banks and financial institutions benefit from continued lending, consumer spending, and business investment. Even if interest rates remain higher for longer, the sector can generate earnings through net interest income, payment volumes, trading activity, and asset management fees.

Structural Trends: The Select Sector index which is tracked by the State Street Financial Select Sector SPDR ETF (XLF) is not limited to traditional banking. Companies such as Visa Inc. Class A (V), Mastercard Incorporated Class A (MA), and American Express Co (AXP) reflect the long term shift toward digital payments. At the same time, firms like Berkshire Hathaway Inc. Class B (BRK.B) adds exposure to insurance and diversified financial operations.

Risk Factors:
The financial sector remains cyclical. A slowdown in economic activity, rising credit losses, or stress in lending markets could pressure earnings. Regulatory changes and sharp moves in interest rates may also impact profitability. While financials are generally more stable than high growth sectors, they are still sensitive to shifts in the economic cycle.

Neža Molk, Analyst, eToro

Jakub Rochlitz’s Top Picks for 2026

The SaaS industry stands out as the prime place to pick winning stocks for 2026. As we enter the third phase of the AI revolution – integrating AI into existing software and scaling new AI-first applications – SaaS incumbents are likely to benefit.

Structural Change: While hardware and cloud sentiment has softened due to accelerating chip performance, rising energy efficiency, and fears of excess compute supply, these same forces work in favor of software. A potential overbuilding of AI infrastructure could compress margins for cloud and hardware vendors, triggering competitive pricing.

Cost Benefits: For SaaS companies, however, “compute” is an input cost. Cheaper, more abundant computing power directly boosts the profitability and feasibility of AI-enhanced products, widening use cases and increasing ROI. This creates a structural tailwind for the entire industry. The strongest beneficiaries are likely to be established firms with proven business models, large existing datasets for model training, and large customer bases that allow rapid distribution of new AI features.

Potential Stocks: Salesforce (CRM) is a compelling example. Trading below its historical and peer multiples, the market appears to underprice its strategic position. As the pioneer of the SaaS model, Salesforce commands more than 20% of the global CRM market – well ahead of any rival.

Salesforce’s proven “land-and-expand” strategy, supported by a tightly integrated product suite, gives the company a clear pathway to scale its AI capabilities across existing workflows. The result is a combination of potential margin expansion, incremental recurring revenue, and deeper customer lock-in.

Risk Factors: Despite the recurring revenue model, the SaaS sector is cyclical and can fall sharply during bear markets or economic downturns, as businesses cut back on software spending.

Jakub Rochlitz, Analyst, eToro

Bogdan Maioreanu’s Top Picks for 2026

Micron Technology is a beneficiary of the accelerated global build-out of AI infrastructure, data centres, and high-performance computing. While the stock has already tripled in 2025, in 2026 we might witness a structural shift in memory demand. This helps Micron’s strengthening competitive position in the high-bandwidth memory (HBM) field.

Strategic Positioning: Micron (MU) operates as a critical equipment provider to the AI revolution, supplying essential memory and storage solutions to the likes of NVIDIA and AMD. The company has established itself as one of only three global manufacturers of HBM with the complex technology and massive capital requirements of that sector creating significant barriers to entry and an oligopoly market which is boosting Micron’s pricing power.

Strong Growth Profile: Micron’s financial trajectory has inflected dramatically. Q1 FY26 revenue surged 57% year-over-year to $13.64 billion, while non-GAAP EPS of $4.78 represented a 167% increase and exceeded consensus. The Q2 FY26 guidance projects revenue to grow 132% year-over-year. The HBM market itself is forecast to grow from $35 billion in 2025 to $100 billion in 2028 which, accompanied by earnings resilience, might shape market behaviour and attract investors’ attention.

Operational Strength and Monetisation: Rising demand and favorable product mix have expanded gross margins to 57%, showing that the company knows how to transfer increase in revenues to its bottom line. The company’s strategic pivot away from commoditized consumer markets toward high-value AI memory has fundamentally improved profitability, with all four business segments delivering double-digit revenue growth and operating margins between 55% and 36% depending on segment.

Risk Factors: Key risks include the inherent cyclicality of the memory semiconductor industry, which has historically experienced sharp downturns following periods of tight supply. Geopolitical tensions and trade restrictions pose supply chain vulnerabilities, while customer concentration risk remains elevated given NVIDIA’s dominance in AI accelerators. Technology transitions, including the potential adoption of co-packaged optics or alternative memory architectures, could eventually disrupt HBM’s market position.

Bogdan Maioreanu, Analyst, eToro

Maximilian Wienke’s Top Pick for 2026

Broadcom Inc remains an AI infrastructure player with strong growth prospects. It sits at the centre of the global AI boom and benefits directly from the explosive growth in demand for computing power.

AI Growth: Demand for custom AI accelerators and AI Ethernet switches is very strong and continues to grow. With strategic customers such as OpenAI, Google and Anthropic, Broadcom is deeply embedded in the build-out of critical AI infrastructure. In the first quarter of 2026, AI revenue is expected to double year over year, which would clearly underscore the ongoing momentum.

Diversification: Broadcom (AVGO) stands out with strong margins in the AI chip segment, well above those of many competitors. Thanks to its broad positioning – chips, networking, software and infrastructure – Broadcom is more diversified and less vulnerable than pure-play chip designers.

In direct comparison, Broadcom appears significantly more stable than companies such as Oracle, which is under heavy capital expenditure pressure. And while Broadcom still trails Nvidia, the company has substantial catch-up potential, particularly due to its leading role in custom AI accelerators.

Strong Income: Broadcom remains a true cash flow powerhouse. The company can fund dividends, share buybacks and investments from its own resources. Broadcom has impressive financial flexibility and has increased its dividend consistently for 15 years, a clear sign of capital discipline and financial strength.

Risk Factors: The current overextended market sentiment around AI stocks, including Broadcom, is extremely bullish, which some analysts worry is indicative of an “AI bubble”. A market correction or a “de-rating event” could significantly impact the stock price.

Maximilian Wienke, Analyst, eToro

Jean-Paul van Oudheusden’s Top Pick for 2026

Amphenol (APH) is an underappreciated beneficiary of the accelerated global build-out of AI infrastructure, data centres, electrification, and digital connectivity. While recent growth has already been strong, consensus expectations for 2026 appear too conservative.

Strategic Positioning: Amphenol is a classic “picks and shovels” provider to the digital economy, supplying mission-critical connectors, cables, sensors and antennas. Its products are essential across AI data centres, high-speed networks, defence electronics, industrial automation and energy infrastructure, giving the company broad exposure without reliance on a single end product or customer.

Strong Growth Profile: Over the past decade, Amphenol has delivered around 10% annual sales growth and even faster earnings growth, supported by both organic expansion and a highly effective acquisition strategy. In 2025, revenue is expected to grow by 50%. For 2026, the market assumes a sharp slowdown, but continued investment in AI, electrification and automation could drive higher-than-expected growth in both sales and profits.

Operational Strength and Monetisation: Rising demand and favourable product mix have pushed gross margins well above historical averages, while operating margins and free cash flow remain strong. With a diversified customer base, solid balance sheet and proven execution, Amphenol is well positioned to convert structural growth trends into sustained earnings growth. In a base case of roughly 25% profit growth, the share price could rise to $160 by the end of 2026.

Risk Factors: Key risks include a cyclical slowdown in end markets, pricing pressure in more standardised products, geopolitical disruptions to supply chains and integration risks from large acquisitions. The most significant longer-term threat comes from new technologies and entrants, such as co-packaged optics, which could alter parts of the interconnect market.

Jean-Paul van Oudheusden, Analyst, eToro

Antoine Fraysse-Soulier’s Top Pick for 2026

Nexans is the world’s second-largest cable solutions provider. It operates in high-voltage cables, energy, offshore, transmission and distribution networks, and smart grid infrastructure. It is a pure player in electrification. Since 2018, Nexans (NEX.PA) has reoriented its model towards value growth (electrification) rather than volume growth, through targeted acquisitions.

Structural Change: Reindustrialization is underway in Europe, driven by German stimulus plans, particularly in infrastructure (electrical networks, transport, and the internet), where the manufacturing of recent orders will truly begin in 2026. Nexans designs solutions and services across the entire electrification value chain. This strategy aligns with the major structural trends of the decade: energy transition, grid modernization, high-voltage cables, European interconnections, and industrial electrification.

Growth Forecast: Nexans is benefiting from strong momentum in its electrification business, with sustained organic growth of 9.4% (Q1-Q3 2025) in higher value-added segments. The order book provides visibility until 2028. The valuation, depressed compared to its peers, does not reflect the improved visibility on demand in the medium term.

Relative Value: The company will benefit from the electrification cycle, which will enable annual organic growth of between 9% and 12% in electrification businesses. Its estimated 2026 P/E ratio is 16 times, while its direct competitor, the Italian company Prysmian (PRY.MI), is at 21 times earnings.

Risk Factors: A significant delay on the Great Sea Interconnector project has put pressure on the share price in the short term, illustrating the execution risks on very large projects. Copper is the group’s strategic raw material and price volatility and supply constraints in the copper market could affect margins.

Antoine Fraysse-Soulier, Market Analyst, eToro

This information is for educational purposes only and should not be taken as investment advice, personal recommendation, or an offer of, or solicitation to, buy or sell any financial instruments.

This material has been prepared without regard to any particular investment objectives or financial situation and has not been prepared in accordance with the legal and regulatory requirements to promote independent research. Not all of the financial instruments and services referred to are offered by eToro and any references to past performance of a financial instrument, index, or a packaged investment product are not, and should not be taken as, a reliable indicator of future results.

eToro makes no representation and assumes no liability as to the accuracy or completeness of the content of this guide. Make sure you understand the risks involved in trading before committing any capital. Never risk more than you are prepared to lose.

This information is for educational purposes only and should not be taken as investment advice, personal recommendation, or an offer of, or solicitation to, buy or sell any financial instruments. This material has been prepared without regard to any particular investment objectives or financial situation and has not been prepared in accordance with the legal and regulatory requirements to promote independent research. Not all of the financial instruments and services referred to are offered by eToro and any references to past performance of a financial instrument, index, or a packaged investment product are not, and should not be taken as, a reliable indicator of future results. The availability of all the above-mentioned products and services may vary by jurisdiction and country. eToro makes no representation and assumes no liability as to the accuracy or completeness of the content of this guide. Make sure you understand the risks involved in trading before committing any capital. Never risk more than you are prepared to lose.

ASIC disclaimer: This information is for educational purposes only and should not be taken as investment advice, personal recommendation, or an offer of, or solicitation to, buy or sell any financial instruments. This material has been prepared without regard to any particular investment objectives or financial situation and has not been prepared in accordance with the legal and regulatory requirements to promote independent research. Not all of the financial instruments and services referred to are offered by eToro and any references to past performance of a financial instrument, index, or a packaged investment product are not, and should not be taken as, a reliable indicator of future results. The availability of all the above-mentioned products and services may vary by jurisdiction and country. eToro makes no representation and assumes no liability as to the accuracy or completeness of the content of this guide. Make sure you understand the risks involved in trading before committing any capital. Never risk more than you are prepared to lose.

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