The International Monetary Fund (IMF) recently projected global GDP growth of approximately 3.3% for 2026, reflecting steady expansion supported in part by continued corporate investment in digital infrastructure and advanced technologies. Labor market data further supports this resilience. In the United States, the Bureau of Labor Statistics (BLS) recently reported that total nonfarm payrolls increased by 130,000 in January 2026, while the unemployment rate remained at 4.3%. The labor force participation rate was 62.5%, signaling a broadly stable employment environment.
Within this macro backdrop, hiring momentum remains firm across aerospace and defense, technology and digital services, with electronics among the faster-growing segments.
As per Deloitte’s recent industry projection report, the global semiconductor industry is expected to reach $975 billion in annual sales in 2026, a historic peak fueled by an intensifying AI infrastructure boom.
Taken together, steady global growth, resilient labor markets and sustained technology investment create a constructive setting for equity markets. In this environment, AI-linked infrastructure and healthcare innovation stand out as two sectors offering clear earnings visibility and structural support heading into mid-2026.
Below are the two sectors that we expect to outperform the broader market this year, supported by strong demand drivers and favorable earnings momentum.
Technology - AI Infrastructure & Semiconductors
AI-driven capital expenditure remains a core earnings catalyst in 2026. Hyperscalers, including Microsoft, Amazon and Alphabet, continue allocating substantial budgets toward AI data centers and cloud infrastructure.
The Semiconductor Industry Association projects global semiconductor sales to approach $1 trillion in 2026, implying 26% industry growth, driven primarily by advanced logic and high-bandwidth memory tied to generative AI workloads. This underpins earnings visibility for GPU and accelerator suppliers such as NVIDIA NVDA and foundry leaders like Taiwan Semiconductor TSM. Equipment vendors, including ASML ASML and Applied Materials AMAT, also benefit from leading-edge node expansion. While TSM currently sports a Zacks Rank #1 (Strong Buy), NVDA, ASML and AMAT carry a Zacks Rank #2 (Buy) each.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Mean Estimate of Long-Term EPS Growth Rate
Image Source: Zacks Investment Research
Industrials – Aerospace, Defense & Electrification
The industrial sector is supported by sustained defense spending, commercial aerospace backlog strength and accelerating electrification investment. U.S. national defense spending has remained above $800 billion annually in recent fiscal years, providing multi-year revenue visibility for prime contractors. This supports substantial funded backlogs at companies such as Lockheed Martin LMT, which exited 2025 with a record $194 billion backlog and RTX, which reported a $268 billion backlog, signaling extended revenue streams. LMT currently carries a Zacks Rank #3 (Hold).
Beyond aerospace and defense, electrification and grid modernization remain powerful structural drivers. Companies such as Eaton and Siemens continue to highlight data center power demand, transmission upgrades and energy transition investments as key growth catalysts. Collectively, these factors provide tangible backlog visibility and earnings support heading into mid-2026.
Mean Estimate of Long-Term EPS Growth Rate
Image Source: Zacks Investment Research
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NVIDIA Corporation (NVDA) : Free Stock Analysis Report
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Taiwan Semiconductor Manufacturing Company Ltd. (TSM) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
