The Rundown - Deep Dive: 5 Predictions for Markets in 2026

Episode Date: January 3, 2026

In our first deep dive of 2026, we share bold predictions for markets in the year ahead. We break down our top sector pick, a controversial take on the Magnificent 7, and why Wall Street’s overwhelming confidence in 2026 feels unusual. Plus, why one of the most powerful people in tech could be closer to the hot seat than anyone expects.

Welcome back to the rundown for our first deep dive of 2026. In this episode, we're going to hit you with some predictions we have for the upcoming year. I'll give you my take on what sector I think will be the best performing and a controversial take on the Magnificent 7. I'll also share a prediction from Mike and Connor. Mike sent me an epic rant about OpenAI that you guys need to hear. We get a great one for you today. Let's dive in. Now, before we get into our predictions, I want to first tell you what Wall Street is saying about

2026 because it's kind of freaking me out. Bloomberg surveyed 21 Wall Street strategists about their 2026 forecast, and every single analyst is predicting that stocks will go up in 26. The average price target amongst these analysts for the S&P 500 sits around 8,000 points, which would be like a 16% gain from where the S&P ended in 2025. So Wall Street is expecting another year of double-digit gains pointing to strong corporate earnings, more rate cuts expected from the Fed, and the AI boom continuing. And look, I tend to be pretty optimistic myself, but when everyone agrees on something, I start to get nervous. You know, usually you got a couple people on Wall Street being contrarian. None of them seem to be contrarian at this point. And

there are a couple reasons to be nervous, you know? While the overall economy seems to be healthy, there are cracks forming in the labor market. Inflation is still above the Fed's 2% target, and there's still fears surrounding an AI bubble. But with all that being said, now let's get into my predictions for 2026, starting with what I think will be the best performing sector over the next year. All right, let's start with my first prediction. I think the best performing sector in 2026 is going to be healthcare. The healthcare sector underperformed the S&P in 2025,

gaining 12% while the overall S&P was up 16%. But I think the healthcare sector is going to have a big year for two main reasons. For one, the health care sector is going to have a big year for two main reasons. For one, the hype around GLP1 pills and number two, the innovation coming from AI. If you listen to our Eli Lilly deep dive from a while back, you know that Eli Lilly became the first trillion dollar health care company thanks in large part to the popularity of their GLP1 drugs, Manjaro and Zeppout. There's also Nova Nordus, which makes Ozempic and Wegovy.

Now, the way these drugs are right now is there are once a week injection. But that is going to change in 2026 because Nova Nordus just got FDA approval to sell the pill version. of WeGovie in late December. And now that Nova Nordus has its approval, this pill is expected to hit the market in the U.S. in January. So any day now. So I expect Nova Nordus whose stock has struggled recently to have a big year in 2026.

Eli Lilly's weight loss drug is also expected to hit the market sometime later this year as well. And these pills are projecting to be very popular because as you can imagine, a lot more people would be open to taking a once a day pill than injecting themselves with a needle once a week. On top of that, pills are a lot cheaper to manufacture than an injection. So these will likely be sold at a lower cost than the injections. That opens up a much

wider market for adoption. Now, I think there's a world where these GLP1 pills are going to end up like statins. I know a lot of people right now that take a daily statin for their high cholesterol, I think it's possible the same thing ends up happening with GLP1s. So yeah, the hype around the gLP1 pills, I think will carry over into the rest of the sector. Now, the second thing that I think will push up health care stocks is AI. Pharmaceutical companies have been using AI to bring drugs to market faster and cheaper. And I think 2026 is when we really see things take off. The efficiency and innovation with AI is going to boost margins across the entire sector, not just for big pharma giants, but also for smaller biotech companies as well. You know, investors like a good narrative,

and I can't think of a better narrative than magic weight loss pills and AI innovation. You add in the tailwinds of an aging demographic where health care spending will continue to increase, you have a sector that is quietly setting up for a massive breakout year. All right, now let's move to prediction. Number two, I think that 2026 will go down as one of the biggest IPO years ever. Now, this isn't that spicy of a take. I mean, IPO activity already started to pick up in 2025. We had some high profile names at the public markets. Figma finally went public in July.

Circle had that massive debut in June. And we closed out the year with Medline in December, which, by the way, raised over $6 billion and was the biggest IPO we've seen in four years. But I think that 2026 is going to be at a completely different level. I think we're going to see an IPO from SpaceX Anthropic. Data Bricks. I think open AI is on the table and even Waymo could file an S-1. You know, SpaceX is already getting a ton of hype right now.

Even Elon Musk has hinted at it. Analysts are projecting it could be the biggest IPO of all time with a market cap of $1.5 trillion. I think these companies are almost going to be forced to IPO soon because they want to hit the public markets to raise as much money as possible while the bull market is still in full swing. You know, valuations are still frothy right now, especially. in AI. And if these companies wait too long, they might miss their window to raise the most money possible. And these companies need as much money as they can get to pursue their ambitious goals. Open AI is committed to spending hundreds of billions of dollars to build AI infrastructure. SpaceX is trying to build AI data centers in space. Waymo is expanding their self-driving cars to

more and more cities. So Google might want to spin them out into a separate company so they can raise more money. So I expect investment bankers to be pretty busy this year as these companies rush to go public while the window is still open. And I think in total this year could be the biggest IPO year that we've had in a long time. And that brings me to my third and possibly most controversial prediction. My most controversial prediction for 2026 is that I think that the Mac 7 will underperform the rest of the S&P 493 in 2026. In fact, I think that the overall tech sector and AI stocks will have a down year. Now, I keep changing my mind and flip-flopping about this, but I'm going to stick with this for now. No, it's no secret that big tech

companies have carried the market for much of the last three years. All the hype and excitement around AI had investor jumping into names like Google, Nvidia, Meta, Microsoft, and other AI-related names like Oracle and Broadcom. Today, the Mac 7 makes up about 35% of the entire S&P 500, making the index very top-heavy, historically speaking. But I think that will change in 2026. See, for the last couple of years, all the value and hype around AI went to the companies building the AI. So I'm talking about the chipmakers, the model builders, and the cloud providers. But I think moving forward, the value is going to shift to the companies using AI. I'm talking about banks, retailers, pharmaceuticals, industrial companies that are using AI to cut costs and boost profit. I think these

boring stocks to get a massive productivity upgrade and their valuations are way more attractive than a tech stock trading at 35 times earnings. And I think this prediction might not be that controversial anymore since some of these AI names already saw a big drawdown in Q4. In fact, Microsoft, Meta, and Amazon all underperformed the S&P 500 in 2025, which might be a lot. might be shocking to some people, but it's a sign that we're already starting to see a rotation out of big tech. Now, I do have one hot take about this. I think sometime in 2026, the CFO at Google, meta, Amazon, or Microsoft is going to look at their balance sheet and say that they need to cut back on CAPEX. And if one of these hyperscalers announces that they're slowing down their AI spending,

I mean, that is going to send a shockwave through the market. All stocks are going to be impacted, but the AI sensitive stocks will take the biggest hit. Look, I'm not hoping for this to happen because I have a lot of exposure to tech stocks. But if these big tech companies actually cut back on AI spending, there's a good chance the stock market is in the red next year. Let's just hope that I'm really wrong about this. So those were my three predictions for 2026. I also asked producer Mike and Connor to each send me a prediction.

So let's start with Connor first. Connor's prediction is that Google will become the most valuable company in the world in 2026. I think that's a good take. I think there's a good chance that's going to happen. Google is currently trading at a $3.8 trillion valuation at the time of this recording, making them the third most valuable company in the world. Nvidia is the most valuable company in the world today with a valuation of $4.5 trillion.

So Google isn't that far off from catching up. Connor gives me a few reasons why he's bullish on Google, pointing to the success of Google's Gemini, which has grown from 450 million users in July to up to 650 million users. Now, personally, I'm using Gemini all the time. Now, Gemini 3 is a really good model. Connor also points to Google moving into the hardware game with plans to launch their new AI smart glasses pretty soon through a partnership with Warby Parker. There's also the Waymo element.

They're planning to expand to 20 new markets this year. And most importantly, Connor points to the TPUs. These are Google's specialized AI chips, which could pose a real threat to Nvidia at some point. The information reported that meta was in talks to rent these new chips from Google Cloud in 2026 to help run their AI systems. So yeah, Connor is predicting a big year ahead for Google

and I'm on board here. Now we're going to talk about Mike's prediction because he came in hot, all right? Mike predicts that Sam Altman will be fired as CEO of OpenAI in 2026. Mike followed that up with a rant, so I'm just going to read what he sent me, all right? Sam Altman is the CEO of arguably the most important company for the AI revolution, rivaling only Jensen Huang. The economy is in his hands. The stakes are incredibly high, but is Altman really the guy who can get it done? There have been a few red flags in the past year. First and foremost is that

Altman declared a code red internally ordering a greater focus as rivals like Google catch up. Anthropic is also on its heels carving out a big chunk of of the enterprise business. Mike has a lot more to say. There's also the questionable financial picture the company is potentially facing a funding shortfall of approximately $207 billion by 2030 to cover the enormous cost of its planned AI infrastructure expansion, according to HSBC. If they can't come up with this money for its $1.4 trillion in CAPEX commitment, that could be troublesome. Mike goes on to say that that pressure has forced open AI to scramble into ads and talk about adult content like it's some kind of flex. That's not what people were expecting to hear.

after Sam Altman has said that Open AIS technology could eventually solve cancer. Then you have a lackluster GPT-5 rollout. PR missteps like telling Jimmy Fallon that he couldn't imagine raising a newborn baby without chat GPT and his constant beeping with Elon Musk online like middle schoolers. Mike is going at him right now. Mike says that we're seeing how reactive and sensitive the market is to any signs of AI demand weakness or signs of a bubble. Altman would be an easy scapegoat if things start to get wobbly in 2026.

When Albin was fired in 2020, which a lot of people forget, he made the way back just a week later. This time, he'll be gone for good. So yeah, Mike dropping a spicy prediction for 2026. I don't think that this will happen, but it's not a bad tape. I feel like a lot of people soured on Sam Altman in 2025, especially after that podcast he did with Brad Gersner, where he got upset when Brad asked him how the company was going to make revenue. You know, how can the company with 13 billion in revenues make $1.4 trillion of spend commitment? You know, and you've heard the criticism, Sam.

We're doing well more revenue than that. Second of all, Brad, if you want to sell your shares, I'll find you a buyer. I just, enough. Ever since then, the vibe has shifted on Sam Altman and Open AI. And yeah, maybe he gets fired. So yeah, something to keep an eye on is Sam Altman on the hot seat as the CEO of Open AI. Producer Mike definitely thinks he is. So those are our predictions for 2026.

I think Mike deserves the award for hottest take of the year so far. And I can't wait to look back on this video a year from now and see how these predictions age. Let us know in the comments on Spotify or YouTube on what you think about our predictions. And if you have any predictions and hot takes yourself, drop them in the comments as well. And while you're there, consider subscribing to the podcast and giving us a five-star rating. If this is your first time listening to the show, just in FYI, we post a 10-minute market recap episode every morning during the week, breaking down the biggest stories in stocks, crypto and corporate drama. So definitely check that out if you want to be a more informed investor in 2026.

Thank you guys again for listening, watching, and commenting. Shout out to Mike and Connor for all the work behind the scenes. And we'll see you guys back here on Monday. Rosen lasagna, medium power, 15 minutes. Sounds like Ojo time. Let's play. Feel the fun with Play Ojo. The online casino with all the latest slot and live casino games.

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