There are four major themes that will drive markets in 2026, Morgan Stanley says: A multipolar world, technology diffusion, societal shifts, and the future of energy.
Let’s get into each, starting with the concept of a multipolar world. For Morgan Stanley, the world is becoming less globalized as governments become more protectionist.
“It’s clear that policymakers globally are implementing policies that will speed up the devolution of the globalization that marked much of the post-Cold War period,” said Stephen C Byrd, an equity strategist at the bank, in a client note on Thursday. “Said more simply, policymakers are keen to promote their visions of national and economic security through less open commerce and more local control of supply chains and key technologies.”
Second, the bank thinks AI will begin to be adopted more broadly by businesses, helping them boost profits. Stocks will be judged on whether their businesses are incorporating AI enough, MS said.
Third, energy demand has turned a corner thanks to the AI infrastructure buildout. While demand for energy has fallen over the last couple of decades, it’s now surging to all-time highs.
“We expect total US energy consumption to rise 10% over the next decade, reversing decades of declines; by 2030, it should eclipse the prior peak, set in 2007,” Byrd wrote.
Finally, societal shifts are happening in things like work (thanks to AI), and aging and longevity.
“We see multiple trends driving broad societal impacts around the world, with effects felt across a surprisingly wide range of industries,” Byrd wrote. “The ripple effects of AI-driven employment disruption/evolution, an aging population, changing consumer preferences, the drive for healthy longevity, and challenging demographics across many geographies will continue to matter for governments, economies, and corporates.”
As a way to play these trends, the bank highlighted 14 US stocks that its analysts have an “overweight” rating on. The stocks are listed below, along with their expected upside to Morgan Stanley’s price targets and the theme each stock falls under.
