Tom Yeung here with your Sunday Digest.
During the 2004 Super Bowl, the brand-new NFL Network aired a commercial featuring a dozen players and coaches who failed to make that year’s Super Bowl XXXVIII. The list of “losers” included Dallas Cowboys owner Jerry Jones and head coach Bill Parcells, Tampa Bay Buccaneers Hall of Fame defensive tackle Warren Sapp, and legendary San Francisco 49ers wide receiver Terrell Owens.
They were all singing classic lyrics from the 1977 musical Annie:
The sun’ll come out, tomorrow
Bet your bottom dollar, that tomorrow
There’ll be sun!
The star-studded clip ends with two players somersaulting on a beach with the tagline:
“Tomorrow, we’re all undefeated again.”
The opposite is also true in both sports and investing. High-performing money managers and star athletes see their excellent annual records wiped out on January 1 (or after the Super Bowl at least).
Everyone then starts over from zero.
Memories of previous victories are brutally short:
- It took just two years of losses to force star investor Julian Robertson to close his hedge fund in March 2000.
- Longtime 49ers head coach George Seifert, who had the second-highest winning record in NFL history, was famously fired after a single losing season with the Carolina Panthers.
- University of Miami football coach Larry Coker (with a 59-15 record) was famously fired after a single losing season.
- And it’s hard to forget “Bond King” Bill Gross getting forced out of his own firm in 2014 after just 16 months of outflows from PIMCO’s flagship Total Return Fund.
And 2026 will be a crucial year for stock pickers.
You see, 2025 was a phenomenal time for most of these folks.
High-performing companies generally saw their share prices rise. And here at InvestorPlace, the recommendations from our three senior analysts (and me) performed marvelously. My 5 Stocks to Buy for 2025 outperformed the S&P 500 by almost 1,000 basis points by midyear.
And Louis Navellier, Eric Fry, and Luke Lango saw their “best of the best” shared recommendations surge 32% between December 2024 and December 2025. These recommendations, their Power Portfolio 2025, more than tripled the returns of the Dow Jones Industrial Average!
Your portfolio might also have done quite well.
However, what worked in 2025 might not do as well in 2026. Valuations among the top AI companies are reaching eye-watering levels. Even if they do keep going up, it will be a rally made on borrowed time.
And so, our three analysts are joining forces again this December to re-prove themselves with Power Portfolio 2026. Their “best of the best” recommendations take on a new strategy that changes out their 2025 AI-focused bets for 11 stocks that are at the cusp of a separate investment boom: one led by the trillion-dollar purse of the U.S. government.
In fact, our three analysts believe we’re at the start of an $11.3 trillion investment bonanza aimed at turning America back into a global powerhouse. They outline this in an upcoming presentation they’re calling The American Dream 2.0 Summit.
In this free broadcast, they will explain why a new set of industrial policies is about to turn the global economy on its head, and which companies are set to benefit.
You can sign up for their American Dream 2.0 Summit here.
Now, as our analysts put together their new Power Portfolio, many picks didn’t quite make the cut. These companies were either too risky, too expensive, or not direct beneficiaries of the government’s investment boom.
But to show you how much thought our analysts put into their Power Portfolio 2026 picks, I’ve been given permission to reveal three considerations that should do well in the coming year, even though they didn’t end up in their final list.
Let’s dive in…
Top Stock for 2026 No. 1: The AI Payments Platform
On October 28, payments firm PayPal Holdings Inc. (PYPL) offered investors an early Halloween “treat” after announcing it would become the first and only payments platform on ChatGPT. Starting in 2026, users of the chatbot will be able to discover products, add items to a shopping cart, and check out directly without leaving ChatGPT.
That’s only possible because PayPal knows all the merchants and customers on its payments network. Fraudulent merchants are quickly removed, and compromised user accounts can be quickly disabled.
Meanwhile, PayPal’s competitors only see a tiny sliver of the process, so they must guess when fraud is happening. Payment processors (Visa, Mastercard) only see the “pipes” of transaction networks, card-issuing banks (Bank of America, Chase) know the end customer, and point-of-sale companies (Fiserv) are merchant-centric.
That’s why PayPal has the lowest chargeback rate of any comparable firm, and why refunds can happen instantaneously. It’s also why PayPal was chosen to lead ChatGPT’s push into “agentic e-commerce.” Chatbots are often fooled by “prompt injection,” where unscrupulous merchants attempt to trick an AI with new instructions. PayPal can quickly identify these bad actors and kick them off the network.
PayPal’s technology also allows OpenAI to add guardrails, because the payments firm runs the routing, validation, and other behind-the-scenes elements that secure a transaction.
Last week, PayPal inked a separate deal with OpenAI rival Perplexity to offer the same agentic AI service.
Nevertheless, the fintech firm trades at a ludicrously low valuation. Shares trade at under 12 times forward earnings – half of its 24X long-term average, and well below the 33X multiple enjoyed by slow-growth Mastercard Inc. (MA).
Keep in mind that PayPal is receiving the U.S. government’s investment dollars indirectly through OpenAI, so growth is slightly slower than we would like. So, even though PayPal is one of my top picks for 2026, it didn’t quite make the cut into our analysts’ Power Portfolio 2026.
Top Stock for 2026 No. 2: The Acquisition Target
It’s been a tough year for FactSet Research Systems Inc. (FDS), a financial data firm that provides information to asset managers, investment bankers, and hedge funds. Shares of this blue-chip data company have fallen 42% since January on fears that generative AI could commoditize its business.
However, these fears are overblown. The finance industry relies on accurate information, and FactSet provides the vetted data sets these traders need. FDS now trades at just 16 times forward earnings, its lowest figure since the 2008 financial crisis. A return to average valuations suggests a 20% upside over each of the next three years.
In addition, the administration’s focus on revamping America’s competitive spirit has kick-started a new wave of mergers and acquisitions (M&A), which typically creates a boost in demand for FactSet’s data services. In October, total deal value soared 147% from the year before, and analysts expect M&A activity to keep rising through 2026.
The U.S. Department of Justice has shown willingness to entertain billion-dollar mergers like the one between railroad giants Union Pacific Corp. (UNP) and Norfolk Southern Corp. (NSC) if it makes America more competitive.
Most importantly, FactSet itself is a ripe target for acquisition. The industry has recently seen several major mergers, including LSE Group (LSEGY) acquiring Refinitiv (formerly known as Thomson Reuters), and S&P Global Inc. (SPGI) acquiring HIS Markit. An industry-wide shift toward total portfolio approach (TPA) (where diversification is done through all risk factors, rather than via asset classes) makes vendor consolidation even more likely.
And so, though FactSet itself is not a candidate for direct federal investment, its exposure to the M&A market means it will still receive an indirect benefit from this new dealmaking.
Top Stock for 2026 No. 3: Playing the New Industrial Revolution
The Trump administration made a splash last July after announcing the Department of War would invest $400 million into MP Materials Corp. (MP), America’s largest rare earths miner. China currently controls 90% of global rare earths processing, and threats from its government to ban exports to the U.S. have sent regulators scrambling for alternative sources.
Other metals have since become high priority. In September, the U.S. Department of Energy took a 5% stake in Lithium Americas Corp. (LAC), the owner of America’s sole lithium mine. Then on November 6, the administration added 10 new materials to a list of minerals deemed vital to the U.S. economy and national security, including copper, uranium, and fertilizer.
Louis, Eric, and Luke will reveal their top under-the-radar pick in this space during their special American Dream 2.0 Summit (reserve your spot here).
However, it’s important to consider one overlooked mineral that was already on that list:
Titanium.
This heat-resistant metal is used to make titanium dioxide (TiO2), a material used in everything from ceramic capacitors to data center cooling equipment. TiO2 also has nontoxic whitening properties that allow its use in toothpaste, house paints, and sunscreen. It was added to the list of critical minerals in 2018 during President Trump’s first term.
For the past several years, Chinese makers dumped this product onto the world market. Much like rare earths, the titanium dioxide industry became known for low returns, cut-throat pricing, and high-profile business failures. In September, U.K. maker Venator Materials declared bankruptcy for the second time in two years and sold its remaining assets to China-based LB Group. Chinese firms now control roughly three-quarters of global TiO2 production.
That’s where Tronox Holdings PLC (TROX) comes in.
Tronox is the world’s largest, fully integrated producer of TiO2. It mines ores in several countries, including South Africa, Australia, and Brazil, then processes them at company-owned sites. This vertical integration has allowed Tronox to achieve operating profit margins of 10% over the last five years, even in the face of Chinese price dumping.
America and China’s spat over rare earths is now creating a new rush to protect Western sources of titanium dioxide. Over the past several months, Saudi Arabia and Brazil have implemented anti-dumping tariffs on Chinese TiO2 imports. We expect India to follow suit.
That should have a bullish effect on Tronox, which has seen shares plummet 85% from its 2021 peak. The company remains a crucial maker of this critical mineral, and now has a 6X to 8X upside if business re-normalizes. (Shares could go to zero otherwise.)
Though Tronox remains too risky for Power Portfolio 2026, risk-seeking investors could still do well buying just a little of this potentially explosive bet.
Power Portfolio 2026
The pressure for top performers to keep performing was summarized brilliantly in a 1926 quote attributed to Hollywood star Douglas Fairbanks:
“A man’s only as good as his last picture.”
Fairbanks would have known. The “King of Hollywood” successfully reinvented himself from a comedic actor in the 1910s into the swashbuckling hero of the 1920s, who starred in hits like The Mark of Zorro and The Thief of Bagdad. His career then quickly declined in the late ’20s with the rise of the “talkies.”
Sports stars face similar pressures to perform, especially as they age.
Fortunately, investors can be far nimbler. Picking stocks does not involve innate acting skills, athletic ability, or any other hereditary trait. Instead, the top minds on Wall Street regularly change their strategies to suit the times.
Warren Buffett did this in the 1980s when he moved away from “cigar butt” investing in favor of cash-producing firms, and then again in the 2000s with investments in tech companies like Apple Inc. (AAPL). George Soros began with European equities before moving to currency trading.
2026 will require another pivot from stock pickers. Mega-cap tech firms are beginning to reach the limits of their growth, and seven companies now make up a third of the U.S. stock market. The S&P 500 rally is riding on an increasingly narrow base.
Our three analysts will help you navigate this shift in their upcoming presentation, The American Dream 2.0 Summit. I highly recommend you sign up for the event, which will happen on Monday, December 8, at 10 a.m. Eastern.
Until next week,
Thomas Yeung, CFA
Market Analyst, InvestorPlace
