Whatever happens in 2026, AI will be in the middle of it.
While the term “artificial intelligence” has been around since the 1950s, AI arguably didn’t go mainstream until November 2022, when ChatGPT exploded into our lives.
The AI-powered chatbot from OpenAI became the fastest-growing app of all time and ushered in a strange new world that we’re still trying to figure out.
AI is a powerful force in the global economy. Goldman Sachs noted that the concentration of market capitalization among a handful of technology companies is the highest on record.
Fueled in part by spending on AI, the top tech stocks accounted for 53% of the S&P 500’s return in 2025, the firm said.
“This concentration has been a clear positive for the market during the last few years,” said Ben Snider, Goldman Sachs’ chief US equity strategist.
The firm said that the key risks to stock market returns include the trajectory of AI capital expenditure, returns on that investment spending, and the impact of AI adoption.
The largest public hyperscale tech companies had roughly $400 billion of capex in 2025, nearly 70% more than in 2024.
Snider said that history shows a mixed track record regarding the eventual success of first movers in periods of major technological innovation.
“While odds are good that some of today’s largest companies achieve that success, the magnitudes of current spending and market caps alongside increasing competition within the group suggest a diminishing probability that all of today’s market leaders generate enough long-term profits to sufficiently reward today’s investors,” Snider said.
The AI trade in 2026 is likely to be defined by a deceleration in investment spending growth, a rise in AI adoption, “and consequent rotations within the AI trade rather than widespread AI exuberance or gloom,” Snider said,
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Joe Davis, Vanguard’s global chief economist, said the firm expects that anticipate that AI will stand out among other megatrends, “given its capacity to transform the labor market and drive productivity,” adding that AI investment’s outsized contribution to economic growth represents the key risk factor in 2026.
“The ongoing wave of AI-driven physical investment is expected to be a powerful force, reminiscent of past periods of major capital expansion such as the development of railroads in the mid-19th century and the late-1990s information and telecommunications surge,” he said.
Davis said Vanguard’s analysis suggests that this investment cycle is still underway, supporting the firm’s projection of up to a 60% chance that the U.S. economy will achieve 3% real GDP growth in the coming years.
“But this future is not quite now,” he said.
This year, Davis said, the U.S. is positioned for a more modest acceleration in growth to about 2.25%, supported by AI investment and the fiscal thrust of the One Big Beautiful Bill Act, which President Donald Trump signed into law on July 4.
The first half of the year may be softer given the lingering effects of the stagflationary megatrend shocks of tariffs and demographics, Davis added, as well as yet-to-materialize broad-based gains in worker productivity.
Wedbush analysts see AI dispersion — favoring execution over exposure — will be one of the top investments of the year, and the firm is focusing on the very biggest names in the field: Nvidia (NVDA), Microsoft (MSFT), Alphabet (GOOGL), and Meta Platforms (META).
“We favor large caps over small caps given capital intensity requirements, component access advantages (particularly memory supply), and superior balance sheet resilience if liquidity concerns intensify,” the firm said in a Jan. 15 research note.
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The firm said that last summer, stock market chatter picked up speed when OpenAI began making massive spending commitments. However, unlike previous major technology shifts, Wedbush said the most important difference is the speed of monetization.
In 1998, only 42.1% of households owned a personal computer, the firm said. Now, roughly 90% of households own some kind of personal computer in their home, as well as smartphones.
“Smart phones have become a necessity — not a want — as the world around us has become digitalized,” the firm said. “This structural shift has accelerated the adoption phase and should continue to be seen through the monetization phase.”
The common denominator in prior stock market bubble bursts has often been a backdrop of tightening conditions in financial markets, but in Wedbush’s view, this is a low-probability scenario in 2026.
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“Even with continued AI Bubble talk, investor sentiment skews bullish entering 2026 despite macro and policy uncertainties,” the firm said. “Elevated valuations continue to reflect confidence in the AI investment cycle, which is viewed as a long-term driver of productivity gains and increased earnings power.”
While questions persist around policy and consumer health, Wedbush said that these concerns haven’t disrupted conviction in the AI narrative.
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This story was originally published by TheStreet on Jan 15, 2026, where it first appeared in the Economy section. Add TheStreet as a Preferred Source by clicking here.