Where to invest to capture the broadening stock market rally in 2026, according to Goldman Sachs

Some of the best opportunities in the market next year might have nothing to do with the AI trade.

That’s the view at Goldman Sachs Asset Management sees a handful of areas of the market that could benefit as the rally in mega-cap tech broadens out, Greg Calnon, the cohead of public investing at the bank’s asset management arm, said.

The outlook for markets generally looks strong going into next year for risk assets, Calnon told CNBC this week, pointing to tailwinds like the Fed continuing to cut interest rates.

That’s already started to benefit areas of the market this year that are out of the spotlight, he suggested, pointing to three spots in particular that could be good opportunities for investors as the pool of market winners broadens.

Here are some of the bank’s investment ideas going into the next year:

1. Small caps

Small-cap companies are at the “front lines” of the artificial intelligence boom, despite most of the attention being paid to the hyperscalers, Calnon said.

That’s because many small firms are positioned to compete in “niche markets,” he said, referring to how small companies aren’t trying to go head-to-head with some of the largest spenders in the AI trade.

Valuations are also attractive relative to large-cap stocks, he added.

The Russell 2000 index is up 11.3% year-to-date.

“I think there’s a lot of opportunities here,” Calnon said, adding that he believed small firms were driving “a lot of innovation.”

2. Healthcare stocks

Healthcare is one small sector of the market that seems to be benefiting in part due to the hype for AI, Calnon suggested. He pointed to signs the rally was already started to broaden out to the sector, with the iShares US Healthcare ETF up 14.5% year-to-date.

“You’re seeing that with the AI healthcare piece,” Calnon said of investment opportunities in specific sectors of the S&P 500. “Definitely healthcare being the tip of that spear.”

3. International stocks

The market rally has already broadened out to international stocks this year, which ahve outperformed the US equity market, Calnon noted. The Vanguard Total International Stock Index Fund ETF is up 26.8% year-to-date.

In a previous note to clients, Goldman Sachs said it believed international stocks would widely outpace the performance of the US stock market over the next 10 years.

The S&P 500 is expected to return just 6.5% a year over the next decade, per the bank’s calculations, compared to the 10% annualized gains in emerging markets and most Asian stocks.

“It doesn’t need to be at the expense of the US. But I think we’ve been so caught up in, it’s the US or nothing, that other markets can participate,” he said.