2026 Sector Outlook: Energy Will Surprise, Tech Will Remain On Top
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Jack Bowman8.32K FollowersFollow5ShareSavePlay(12min)CommentsSummaryI am bullish on XLK (Technology), XLC (Communications), and XLE (Energy) for the remainder of this year and into next.Tech's AI-driven CapEx cycle should sustain outperformance, provided profit margins remain resilient and consumer health holds up.Energy - XLE - is underappreciated, with sector allocation below 3%, yet poised for demand growth as data center and utility buildouts accelerate.Quantitative ratings support XLK and XLC, but I see XLE as a contrarian buy despite recent negative momentum and macroeconomic risks.The largest risk to the thesis is that AI ends up being a house of cards that can be undone by secular consumer pain. gece33/iStock via Getty Images Last month, I put out a warning that the market dip was either temporary or a "full sector rotation." Of course, the title was a little hyperbolic, but I still believe that we are seeing theThis article was written byJack Bowman8.32K FollowersFollowNewsletter Author | Investment Advisor | Top 5% of Experts on TipRanks | Long Signal, Short Noise | I am a macro-oriented and data-driven investor who obsesses over connecting dots that others don't see (or want to see), expressing my views through concentrated, asymmetrical, and high-conviction positions. I manage risk with discipline, often reminding investors that position sizing is often more important than security selection. I'm on a quest to uncover narrative trends before mainstream financial media, a process I've been describing as the hunt for information alpha. My weekly newsletter is called The Macro Obsession. "Successful investing requires holding uncomfortably idiosyncratic positions." — Howard Marks, paraphrasing David Swensen "History does not repeat, it instructs." — Timothy Snyder, On TyrannyAnalyst’s Disclosure:I/we have a beneficial long position in the shares of XLC, XLE, XLK either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.