Global Equity Outlook 2026

Positive Outlook for the Global Economy

How do you assess global economic developments heading into 2026? Are we heading for a soft landing, stagnation, or signs of a renewed recession?

We have a positive outlook for the global economy in 2026. We expect continued support from both monetary and fiscal policy, with central banks cutting rates in most major economies and fiscal measures in the US, Eurozone, and China. In addition, the ramp-up in AI infrastructure spend will be an important growth and productivity driver globally.

The US government budget, which was recently approved, the so-called “One Big Beautiful Bill Act” or OBBBA for short, will stimulate further growth through increased investments, tax refunds and tax cuts. We also believe that the headwind from the tariff increases from 2025 will subside, and that growing business optimism will boost non-AI capital expenditure, supporting both employment and income growth.

Inflation and Interest Rates: Towards Normalization

Many investors are talking about a “post-inflation normalization.” Do you expect inflation to remain subdued until 2026, or is a renewed increase possible?

We see inflation trending down in 2026, though probably not all the way to the 2% target set by most central banks.

Lower oil prices, decelerating service prices, and reduced tariff pressures will help, but we still see inflationary pressures from electricity prices and lodging.

Artificial Intelligence Reshaping Investment Processes

How will artificial intelligence impact your investment process by 2026?

We have used AI for several years already and continue to see improvements. AI helps us summarize meetings, analyze earnings calls, meeting preparation, process large datasets to uncover patterns, build financial models, simulate scenarios, as well as conducting industry and company research.

Sectors Set to Win

Which sectors do you expect to be structural winners in 2026?

Three sectors stand out.

First, healthcare: with a growing, wealthier, and aging population, healthcare spending will continue to rise. The sector will also be a key beneficiary from AI ranging from drug discovery, clinical trials, precision medicine, to diagnostics. We also find the sector attractively valued and we expect M&A to pick up next year.

Second, we see an AI super-cycle driving record investments in data centers, benefiting the entire value chain including the hyperscalers, semiconductor companies, energy producers and construction companies.

Finally, defense: in an increasingly uncertain world, most countries are ramping up defense budgets. NATO members, for example, have committed to spending 5% of GDP on defense and infrastructure over the next decade. The defense industry is rapidly changing with new technologies and AI, creating many new investment opportunities.

European and Nordic Opportunities

In a market dominated by the US and China, where do you see the strongest opportunities for European and Nordic companies?

Global competition is intensifying as exemplified by China’s rise in the automotive industry and its global dominance in processing rare earths. Nevertheless, there are several industries where we see European and Nordic companies remain globally competitive. Some examples below:

• Industrial efficiency, automation and electrification (Atlas Copco, ABB, Schneider, Siemens Energy)
• Global logistics (DSV, DHL)
• Business software (Hexagon, SAP)
• Semiconductors (ASML)
• Critical telecom equipment and infrastructure (Ericsson, Nokia)
• Defense (Rheinmetall and Kongsberg)
• Pharmaceuticals and life sciences (Roche, Novo Nordisk, AstraZeneca), and
• Luxury goods (LVMH, Hermès, Richemont)

The AI Boom and Valuations

With the AI boom driving some mega-caps to record valuation levels, do you expect a correction or a broader expansion of the AI ecosystem?

An equity correction would not be surprising as the AI revolution progresses, but I do not believe we are in a bubble anywhere close to the one we experienced in 2000. Multiples are high for a reason: fantastic business models, strong earnings growth, solid cash flow, robust balance sheets, and high margins. Monetization of AI will increase as more companies adopt AI to boost revenues and cut costs.

Renewables: Outlook and Challenges

How do you view the outlook for renewable energy given high financing costs and political uncertainty?

Renewable energy remains cost-competitive, even with current interest rates, and is the fastest-growing technology for power generation. Demand for renewable energy remains strong globally – also helped by falling battery costs which makes storage more viable.

While financing volatility has been a challenge, the dramatic increase in electricity demand—especially driven by AI infrastructure—means renewables are needed and will be funded.

Political uncertainty has also decreased. Contrary to most beliefs, the OBBBA provides a stable regulatory framework through 2030 (except for offshore wind). In Europe and elsewhere, political support remains largely intact, driven by energy security and cost efficiency.

Conclusion:

I have a positive outlook for the global economy in 2026 helped by less tariff headwind, supportive central banks, fiscal stimulus, falling inflation, increased capex (both AI and non-AI) and increased business sentiment.