Meet the 2026 stock market. It’s the same AI-reliant market of 2025

The new year is starting off looking a lot like the old one.

The first trading day of 2026 kicked off Friday, with tech leading the way as it had last year. The Magnificent Seven stocks are all higher, with Nvidia and Alphabet advancing around 3%, each. Semiconductors are rising as a group, with the VanEck Semiconductor ETF up almost 4%. Micron and AMD have gained more than 7% and 5%, respectively.

Artificial intelligence was the best trade of 2025, as it had been over the last three years, but it stumbled toward the finish line as investors, wary of high valuations, started to pivot toward other groups. The Nasdaq Composite, known for its heavy exposure toward tech companies, ended last year with two straight months of losses.

The rotation had many strategists nervous tech stocks will find an uphill climb more difficult in 2026, as traders start demanding companies justify their massive AI spending with profitable applications. Many investors called for a broadening out of the stock market, with companies more sensitive to the economic cycle taking the mantle from tech to lead the market in 2026. They viewed that as a healthy development to extend the bull market.

It’s very early, but so far, investors in 2026 are staying with their favorite technology stocks. Nancy Tengler, investment chief at Laffer Tengler Investments, said she plans to selectively buy any dips, as she had in the past year. CrowdStrike and AMD are among the names she highlighted in her portfolio.

“The tech names are where you want to be focused, and I think at least for another year,” said Tengler, adding, “Because the winners, in our view, are going to continue to win.”

AI stocks like Palantir, which gained 135% in 2025, and Oracle, which added 17% in a volatile move last year, were also higher.

According to the 2026 CNBC Market Strategist Survey, Wall Street expects the S&P 500 will climb by roughly 11% in 2026 — a respectable rise that nevertheless falls short of the advance of the last three.

Others worry that the market could look less sanguine from here. On Wednesday, Bank of America strategist Savita Subramanian noted the S&P 500 is expensive, meaning “risks to the index abound in 2026.” The strategist’s 7,100 year-end target for the S&P 500 is among the lowest of those surveyed.

Elsewhere, Adam Parker, founder of Trivariate Research, told CNBC’s “Squawk on the Street” this past week that the level of optimism on the Street has him nervous for 2026.

“I think the consensus is pretty bullish,” Parker said. “You’re betting on strong earnings growth, and I don’t know if that’s as likely.”

Still, tech’s outperformance to start the new year suggests the AI trade still has legs, at least for now.