Goldman Sachs Asset Management has outlined promising investment opportunities for 2026, focusing on areas that may thrive outside the current spotlight on artificial intelligence (AI) stocks. According to Greg Calnon, cohead of public investing at Goldman Sachs, the broader market rally is expected to benefit from factors like ongoing interest rate cuts by the Federal Reserve.
Calnon shared insights during a recent interview with CNBC, emphasizing that the outlook for risk assets remains strong. He noted that the rally in mega-cap technology stocks is likely to expand, creating a fertile environment for various sectors, particularly small-cap companies, healthcare, and international stocks.
Small-Cap Companies Poised for Growth
Calnon highlighted that small-cap companies are positioned at the forefront of the AI boom. Despite the prevailing focus on larger tech firms, many smaller entities are carving out competitive niches. He stated, “Many small firms are positioned to compete in niche markets,” suggesting that they are not directly competing with the largest AI spenders.
The Russell 2000 index, which tracks small-cap stocks, has already seen a year-to-date increase of 11.3%. Calnon expressed optimism about the potential of small firms to drive innovation and capture market share in the coming years.
Healthcare Sector Gaining Momentum
The healthcare sector is another area that appears to be benefiting from the enthusiasm surrounding AI. Calnon pointed out that the iShares US Healthcare ETF has risen by 14.5% year-to-date, reflecting a broader market rally that is beginning to include healthcare investments. He remarked, “Definitely healthcare being the tip of that spear,” indicating that specific sectors within the S&P 500 are ripe for investment opportunities.
The integration of AI into healthcare systems has created new avenues for growth, making this sector a focal point for investors looking to capitalize on emerging technologies.
International Stocks Outperforming US Market
Calnon also noted that international stocks have outperformed their US counterparts this year. The Vanguard Total International Stock Index Fund ETF has surged by 26.8% year-to-date, highlighting a significant shift in global market dynamics. In a previous report, Goldman Sachs projected that international equities would outperform US stocks over the next decade, estimating that the S&P 500 could yield only 6.5% annually, while emerging markets might see returns of around 10%.
He emphasized that this does not imply a decline in US markets but rather the potential for other regions to thrive alongside them. “I think we’ve been so caught up in, it’s the US or nothing, that other markets can participate,” he stated, suggesting a more inclusive approach to investment strategies moving forward.
As investors prepare for 2026, Goldman Sachs’ insights provide a roadmap towards sectors that hold promise beyond the current tech narrative. With small-cap companies, healthcare innovations, and international equities taking center stage, the financial landscape appears poised for a diversified rally that could benefit a wide range of investors.
