According to Reuters, global investors are set to pivot towards undervalued assets in 2026 as concerns over an AI stock bubble grow. Analysts from firms like BlackRock and Morgan Stanley highlight specific opportunities, including U.S. small-cap stocks, which could see a 14% gain in the Russell 2000 index to 2,825 points. Gold, after a historic 2025, is forecast by J.P. Morgan and Bank of America to potentially hit $5,000 an ounce. Furthermore, sectors like healthcare and financials are expected to outperform, while a weaker U.S. dollar could boost emerging market currencies and assets. The report also notes a potential “supercycle” for event contracts, with revenue possibly jumping five-fold by 2030.
The AI Shift and Small-Cap Comeback
Here’s the thing: when everyone is crowded into the same mega-cap tech trade, the smart money starts looking for the exit—or at least the next parking spot. The Reuters piece suggests that’s exactly what’s happening. After a wild 2025 that saw tariffs-induced plunges and AI-fueled rebounds, the easy money in big tech might be made. So where next? The analysis points squarely at U.S. small-cap stocks. They’ve been laggards for years, but the logic is simple: with the Fed expected to cut rates, these more indebted companies get relief first. Combine that with returning earnings growth, and you have a recipe for a comeback. It’s a classic early-cycle play that makes a ton of sense if you believe the economic soft landing narrative.
Gold, EM Markets, and Other Winners
But it’s not just small caps. The report outlines a whole dashboard of alternative ideas. Gold at $5,000 an ounce? That’s a staggering call, but it speaks to a world where central banks keep buying and the dollar weakens. And speaking of a weaker dollar, that’s the jet fuel for emerging markets. The BofA strategist quote is key: EMs are now less volatile than developed markets. That’s a huge psychological shift for investors who’ve long seen them as inherently risky. Meanwhile, sectors like healthcare (thanks, GLP-1 drugs) and financials (hello, M&A and loan growth) offer policy and cyclical tailwinds. It’s a broad-based value hunt.
The Wild Card: Event Contracts
Now, the most fascinating—and frankly, risky—corner of this forecast is the rise of “event contracts.” Let’s call them what they are: regulated betting on real-world outcomes. Companies like Robinhood and Coinbase are diving in, and analysts see a market that could quintuple by 2030. But is this investing or speculating? The report notes regulators are already asking that question, accusing these contracts of resembling sports betting. It’s a supercycle built on retail demand, and history tells us those can end messy. Still, it’s a undeniable trend showing how the boundaries of “asset classes” are blurring.
A Cautious Optimism
So what’s the overall take? The tone from analysts isn’t bearish; it’s selectively optimistic. The message is that the bull market broadens out, or it doesn’t continue at all. You can’t just ride the “Magnificent Seven” forever. This rotation into small caps, EMs, and tangible assets like gold is a sign of a maturing market cycle. Of course, politics—from U.S. Fed appointments to elections in Brazil—could throw a “spanner in the works,” as Reuters puts it. The plan makes sense on paper, but 2026 will test whether investors have the stomach to actually leave the perceived safety of AI winners for these more eclectic value plays. I think the shift has already begun.
