Trader Peter Tuchman wears “2026” glasses as traders work on the floor of the New York Stock Exchange at the opening bell on December 31, 2025.
Timothy A. Clary | Afp | Getty Images
The new year begins and looks very similar to the old one.
The first trading day of 2026 began on Friday, with technology leading the way like last year. The shares of the “Magnificent Seven” are all in the black Nvidia And alphabet increase by around 3% and 2% respectively. Semiconductors as a group are on the rise VanEck Semiconductor ETF increased by almost 4%. micron And AMD have increased by more than 7% and 5% respectively.
As in the past three years, artificial intelligence was the best trade in 2025, but it stumbled toward the finish line as investors, fearful of high valuations, began to turn to other groups. The Nasdaq Composite, known for its heavy exposure to technology companies, ended last year with two straight months of losses.
The rotation has many strategists worried that it will be harder for tech stocks to climb sharply in 2026 as traders begin demanding companies justify their massive AI spending with profitable applications. Many investors have called for an expansion of the stock market, with companies more sensitive to the economic cycle replacing the technology sector to lead the market in 2026. They viewed this as a healthy development to extend the bull market.
It's still very early, but so far investors are sticking with their favorite tech stocks in 2026. Nancy Tengler, chief investment officer at Laffer Tengler Investments, said she plans to buy selectively on dips, as she did last year. CrowdStrike And AMD are among the names she has highlighted in her portfolio. CrowdStrike was down slightly on Friday.
“They want to focus on the tech names, and I think at least for another year,” Tengler said, adding, “Because the winners, in our view, will continue to win.”
Like AI stocks Palantirwhich increased by 135% in 2025, and Oracle, which rose 17% in a volatile move last year, did not rise as much on Friday. Palantir lost less than 1%, while Oracle gained about 1%.
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Palantir, 1 day
According to the CNBC Market Strategist Survey 2026, Wall Street expects the S&P 500 to rise about 11% in 2026 – a respectable increase, but one that falls short of the rise of the last three.
Others fear the market may look less optimistic from here. On Wednesday, Bank of America strategist Savita Subramanian noted that the S&P 500 is expensive, meaning “there are numerous risks to the index in 2026.” The strategist's year-end target for the S&P 500 of 7,100 is among the lowest of all respondents.
Elsewhere, Adam Parker, founder of Trivariate Research, told CNBC's “Squawk on the Street” last week that the level of optimism on the Street for 2026 makes him nervous.
“I think the consensus is pretty optimistic,” Parker said. “They're betting on strong earnings growth, and I don't know if that's as likely.”
Still, the tech industry's outperformance at the start of the new year suggests that AI trading is still on the right track, at least for now.