Market Signal Briefing

Small-caps are off to a fast start in 2026. Is now the time to jump into the Russell 2000 again?

Small-caps have gotten off to a fast start to kick off 2026. The Russell 2000 index is already beating the S&P 500 by more than 8% year to date (through Jan. 21), and it's strung together more than a dozen straight trading days outperforming the large-cap index.

The Russell 2000 hasn't beaten the S&P 500 in a full calendar year since 2020. The Vanguard Russell 2000 ETF's (VTWO 1.80%) price-to-earnings ratio of 17.5 indicates that there's a fair amount of value waiting to be unlocked in this segment of the market. Is 2026 the year it finally happens?

Image source: Getty Images.

What is the Vanguard Russell 2000 ETF? The Vanguard Russell 2000 ETF tracks an index of smaller companies whose market caps fall below those of the large-cap Russell 1000 index. These companies are generally considered to have higher growth potential and lower valuations, but are, in many cases, still unprofitable and potentially more speculative than their more established large-cap counterparts.

That's what makes them a unique diversifier, even though they carry the same "U.S. equity" tag. You get better value, the potential for above-average growth with it, and a market composition significantly different from that of the S&P 500.

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Is the early part of 2026 a signal that the time for small-caps has finally returned?

Benefits from improved breadth in the stock market One of the big trends we've seen so far this year is the huge rotation out of tech and into other areas of the market. Cyclicals, including industrials, energy, and materials, have been the biggest beneficiaries. Investors no longer seem willing to pay a premium valuation for growth, but they still want stocks that benefit from economic growth.

Small-caps slide right into that trend. They don't have the growth tilt, and the Vanguard Russell 2000 ETF's top three sector exposures are industrials, healthcare, and financials. Tech is only the 4th largest sector holding, at around 12%. If cyclicals keep doing well here, small-caps should be able to ride the wave.

Large number of unprofitable companies makes it dangerous The one thing that makes investing in the Russell 2000 less attractive is its lack of quality. Roughly 40% of companies in the index are unprofitable. In a market correction or earnings downturn, that could hurt small-cap performance. Investors are willing to take the swing on unprofitable companies when economic conditions look good. If conditions turn south, the negative earnings are going to be a real black mark.

Overall, the significant slowing in the labor market is a real cause for concern. But the high-level economic numbers still look pretty good. If that trend can be maintained, small-caps and the Vanguard Russell 2000 ETF continue to look attractive here. Just keep an eye on where the trend is heading. If it turns, it might be time to rethink small-caps.

SCHB’s wider company coverage and larger asset base set it apart in ways that may influence portfolio diversification strategies.

The State Street SPDR Portfolio S&P 1500 Composite Stock Market ETF (SPTM 0.04%) and the Schwab U.S. Broad Market ETF (SCHB 0.15%) both aim to mirror the performance of the broad U.S. stock market for a minimal fee, making each a candidate for a core holding in a diversified portfolio.

This comparison examines cost, size, sector tilts, historical returns, and key structural details to help clarify which approach may appeal to investors based on their priorities.

Snapshot (cost & size)MetricSPTMSCHBIssuerSPDRSchwabExpense ratio0.03%0.03%1-yr return (as of Jan. 25, 2026)12.91%12.80%Dividend yield1.13%1.11%Beta (5Y monthly)1.021.05AUM$12 billion$38 billionBeta measures price volatility relative to the S&P 500. The 1-yr return represents total return over the trailing 12 months.

Expense ratios for both ETFs are as low as it gets at 0.03%. With dividend yields also nearly identical, neither fund stands out on cost or payout. Investors comparing these two will likely need to focus on other factors, such as size and diversification.

Performance & risk comparisonMetricSPTMSCHBMax drawdown (5 y)-24.15%-25.40%Growth of $1,000 over 5 years$1,765$1,700What's insideSCHB seeks to track the performance of the Dow Jones U.S. Broad Stock Market Index and holds 2,401 stocks, with a portfolio tilt of 33% technology, 13% financial services, and 11% consumer cyclical.

Its top holdings are Nvidia, Apple, and Microsoft, and the fund has been operating since 2009 with no notable quirks or overlays.

In contrast, SPTM follows the S&P Composite 1500 Index, giving exposure to roughly 1,510 stocks across all market capitalizations. Its top sector allocations are nearly identical to SCHB, and its top three holdings are also Nvidia, Apple, and Microsoft. It was launched in 2000, giving it a longer history than SCHB.

For more guidance on ETF investing, check out the full guide at this link.

What this means for investorsSPTM and SCHB are nearly identical in most ways. They offer the same low expense ratio and nearly matching dividend yields, putting them on fairly equal footing in terms of fees and income.

They also focus primarily on tech stocks, followed by financial services and consumer cyclical stocks. They share the same top three holdings, with those companies making up 18.35% of SCHB’s portfolio compared to 19.79% for SPTM.

With total returns and max drawdowns close to the same, these funds have also shown similar performance and volatility.

The two main differentiators are their assets under management (AUM) and the number of holdings, and SCHB is larger on both accounts. A larger AUM can increase liquidity, allowing investors to buy and sell larger amounts without affecting the ETF’s price.

SCHB also contains nearly 1,000 more stocks than SPTM. While that hasn’t appeared to result in a significant difference in its risk profile or total returns, it can be an advantage for investors seeking greater exposure to the broader market.

Katie Brockman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Oneok has been an excellent income stock over the past couple of decades.

Oneok (OKE 0.71%) offers investors an attractive dividend yield today. At 5.5%, it's several times above the S&P 500's dividend yield, which is approaching its record low at around 1.2%.

While higher-yielding dividend stocks can have higher risk profiles, that's not the case with Oneok's payout. It's on rock-solid ground. That's enabling the pipeline company to give its investors another raise.

Image source: Getty Images.

Another pay bump Oneok recently declared its latest quarterly dividend payment. The diversified energy midstream company will pay $1.07 per share ($4.28 annualized) on Feb. 13 to investors who hold shares by Feb 2. That's a 4% increase from its prior level.

That continues the pipeline company's quarter-century track record of delivering stable to growing dividends for its investors. While Oneok hasn't increased its dividend every year during that period, it has nearly doubled its dividend payment over the past decade. It has a much better track record than its closest peers in the pipeline industry, most of which have reduced their dividend payments at some point over the past 10 years.

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More dividend increases to come Oneok's current target is to grow its dividend by 3% to 4% each year. That's a very achievable goal, given its financial strength and the visible growth it has coming down the pipeline.

The pipeline company's diversified midstream operations generate very stable cash flow as long-term contracts and government-regulated rate structures underpin the bulk of its assets. Additionally, the company has an investment-grade credit rating backed by a conservative 3.5 times leverage ratio.

Oneok has grown significantly in recent years by completing a series of large-scale acquisitions. It sees the potential of capturing several hundred million dollars in additional cost savings and commercial synergies from these deals, including $250 million targeted for 2026.

Meanwhile, the company has several organic expansion projects under construction to expand its midstream operations. It currently has projects underway that should enter commercial service through the middle of 2028, including joint ventures (JVs) to build a new LPG export terminal and a large-scale natural gas pipeline. These projects will provide Oneok with incremental sources of stable cash flow as they enter commercial service over the next few years.

Oneok's strong financial profile will enable the company to continue expanding its operations. It can make bolt-on acquisitions like last year's $940 million deal to acquire the remaining 49.9% JV interest in its Delaware G&P. It can also continue to approve organic capital projects to expand its operations. Securing additional investments would further enhance and extend the visibility of its growth profile.

A rock-solid income stock Oneok offers investors a big-time income stream these days. The pipeline giant's dividend is on a rock-solid foundation, thanks to its stable cash flows and strong financial profile. Meanwhile, with more growth coming down the pipeline, it should have ample fuel to continue increasing its high-yielding payout.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in CSQ over the next 72 hours. 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.

Explore how IWM’s diversified small-cap mix and higher yield contrast with MGK’s focused tech giants and lower fees.

The Vanguard Mega Cap Growth ETF (MGK +0.59%) and iShares Russell 2000 ETF (IWM 1.81%) differ sharply in both cost and portfolio focus, with MGK offering lower expenses and tech concentration, while IWM provides broader small-cap exposure and a higher yield.

Both funds are index-based, but MGK targets the largest U.S. growth stocks, whereas IWM tracks the small-cap Russell 2000 universe. This comparison looks at cost, performance, risk, and portfolio makeup to help investors weigh which approach may appeal to different goals.

Snapshot (cost & size)MetricMGKIWMIssuerVanguardISharesExpense ratio0.07%0.19%1-yr return (as of 2026-01-22)14.4%18.2%Dividend yield0.4%1.0%Beta1.201.34AUM$32.5 billion$73.7 billionBeta measures price volatility relative to the S&P 500; beta is calculated from five-year weekly returns. The 1-yr return represents total return over the trailing 12 months.

IWM carries a higher expense ratio than MGK, making MGK the more affordable choice on fees, while IWM offers a higher dividend yield that may appeal to income-seeking investors.

Performance & risk comparisonMetricMGKIWMMax drawdown (5 y)-36.01%-31.91%Growth of $1,000 over 5 years$1,929$1,256What's insideIWM holds 1,951 stocks, offering broad exposure to U.S. small-caps with sector weights led by healthcare (19%), financial services (16%), and technology (16%). Its largest positions, such as Bloom Energy Class A Corp. (BE 0.51%), Credo Technology Group(CRDO 1.44%), and Kratos Defense and Security (KTOS 3.04%), each account for less than 1.1% of assets, keeping single-company risk low. With a fund age of 25.7 years, IWM provides long-standing access to the small-cap segment.

MGK, by contrast, is highly concentrated in technology (70%), with top holdings like NVIDIA (NVDA +1.60%), Apple (AAPL 0.07%), and Microsoft (MSFT +3.28%) making up over a third of assets. While MGK holds 69 stocks, it focuses on the largest U.S. growth names, resulting in greater exposure to tech sector trends and mega-cap company performance.

For more guidance on ETF investing, check out the full guide at this link.

What this means for investorsChoosing between the Vanguard Mega Cap Growth ETF (MGK) and iShares Russell 2000 ETF (IWM) is about deciding on the type of exposure to the stock market you want.

MGK is about investing in big tech companies, given its 70% weighting towards the technology industry. Due to the rise of the hot artificial intelligence sector, tech is an area expected to experience a lot of growth over the next several years. However, MGK is not very diversified, so if the tech market enters a downturn, the ETF’s performance will be severely impacted. Adding to this is that MGK holds only 69 stocks, making it reliant on the performance of a handful of mega-cap companies, such as Microsoft.

IWM is the opposite of MGK. It targets small-cap companies, and is highly diversified across several sectors and businesses with nearly 2,000 stocks in the ETF. This means if a particular industry or group of companies experiences a decline, the others can help buoy IWM’s performance. The tradeoff is in the ETF’s higher expense ratio although that’s offset to a degree by its higher dividend yield.

For investors who want diversification and greater dividend income, IWM is the better choice. For those seeking exposure to the largest U.S. tech companies at a low cost, MGK is the way to go.

Robert Izquierdo has positions in Apple, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Apple, Bloom Energy, Kratos Defense & Security Solutions, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Both stocks have significant upside potential.

Are you interested in investing in one of the most storied companies in U.S. history? Well, you now have three choices. I'm talking about General Electric, the legendary company founded in 1892 by Thomas Alva Edison, the genius American innovator who invented the phonograph, electric light bulb, motion picture camera, and countless other devices.

Over its 133-year history, General Electric has been just as innovative. It created advanced technologies in hydroelectric power, aviation, energy grids, wind power, healthcare, materials science, and many other fields.

But the company's descent was just as dramatic. It fell apart like a slow-motion car wreck due to too much diversification, failed business strategies, and a disastrous foray into financial services. Losses at GE's financial unit almost sank the company during the Great Recession. The share price plunged more than 80% between 2007 and 2009.

The original GE split into three separate companies The original General Electric was then split into three separate publicly traded companies beginning in 2021. One of them, GE HealthCare Technologies, makes equipment like medical imaging devices, X-ray machines, and ultrasound systems. It's been up and down over the past three years but is now up 25% since it was spun off from the original GE in late 2022. For comparison, the S&P 500 index is up about 75% over that time, so it has underperformed the market.

The stocks of the other two spin-offs, however, have fared much better. GE Aerospace (GE 0.34%) makes jet and turboprop engines, among other aircraft components. And GE Vernova (GEV 0.59%) makes power products that generate, transfer, orchestrate, and store electricity. The two split and began trading as separate public companies in April 2024.

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Since the split, GE Aerospace is up about 100%, and GE Vernova has climbed 400%. The two stocks had a banner 2025. GE Vernova was up 95% last year, and GE Aerospace rose about 85%. That was in a year when the broader market gained about 17%, as measured by the S&P 500. Can they continue to outperform the market in 2026?

There's more demand than supply for aircraft and parts GE Aerospace has huge upside due to a supply-demand imbalance in the aircraft industry. Demand for air travel is up, yet the aviation industry is not supplying the aircraft, components, or necessary maintenance to meet it. Commercial air travel grew more than 10% from 2023 to 2024 and is projected to rise by 4.2% annually through 2030.

But there's currently a severe shortage of aircraft and components due to a production halt during the COVID-19 pandemic, a lack of talent, and an aging global fleet of planes in need of repairs or outright retirements and replacements.

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Aircraft engine maintenance and repair has become a choke point for commercial aviation, according to consulting firm Bain & Company, with shop turnaround times up 35% for legacy engines and 150% for new engines. Bain says these problems won't even peak until mid-2026 and should last through the end of this decade.

GE Aerospace management forecasts double-digit annual revenue growth from 2025 to 2028 and earnings per share (EPS), rising from $6.10 in 2025 to $8.40 in 2028. That's very good news for shareholders.

GE Vernova is a leader in the power equipment industry As for GE Vernova, revenue prospects are significant. The company's backlog of grid and electrification equipment rose $6.5 billion to $26 billion. In December, management said it expects to grow its total backlog from $135 billion to $200 billion by 2028. The company is a leader in the industry and is well-positioned to benefit from increasing power needs of artificial intelligence (AI) data centers.

Image Source: Getty Images.

Even better for shareholders, the company doubled its quarterly dividend to 50 cents and raised its stock buyback plan to $10 billion from $6 billion.

Yes, General Electric is back. But it now comes in three flavors. Two of those could be delicious picks for investors in 2026.

HomeStock IdeasQuick Picks & Lists

SummaryJack Henry & Associates' stock performed well after the company reported solid fiscal first-quarter results, characterized by steady top-line growth and successful contract wins for its modernization solutions.The market re-rated the stock as investors looked past near-term volatility and focused on RGEN’s high-quality consumables mix, strong market positions, and long-term biologics growth tailwinds.Pool Corp.'s shares lagged as demand remained pressured by a slower housing and discretionary spending environment.

Strong tech spending in 2026 will be a tailwind for these two companies operating in fast-growing areas.

The Nasdaq Composite has stitched together impressive overall gains of 111% in the past three years, outpacing the 74% jump in the S&P 500 over the same period. The Nasdaq's outperformance is a result of the technology sector's healthy growth, primarily driven by the adoption of artificial intelligence (AI) across multiple industries.

It won't be surprising to see the tech-focused Nasdaq Composite index head higher in 2026 as well. After all, global AI spending is poised to hit $2.5 trillion this year, according to Gartner. That would be a nearly 44% increase from last year. What's more, global AI spending is anticipated to jump by another 32% in 2027.

That's why now is a good time to take a closer look at a couple of tech stocks poised to benefit from higher AI spending in 2026 and potentially deliver healthy gains for investors.

Image source: Getty Images.

Applied Materials: Strong equipment sales can send this stock higher Shares of semiconductor manufacturing equipment company Applied Materials (AMAT +1.13%) have jumped by 72% in the past six months. That's not surprising, as there is a healthy demand for chipmaking equipment driven by the robust demand for AI-specific semiconductors. Market research firm Omdia estimates that the semiconductor industry's revenue could increase by almost 31% this year to more than $1 billion.

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However, there is a shortage of both logic and memory chips, as evidenced by recent results from Taiwan Semiconductor Manufacturing and Micron Technology. This is why the demand for chipmaking equipment is set to jump in 2026. According to industry association SEMI, semiconductor equipment sales could increase to $145 billion in 2026 from $133 billion last year. However, don't be surprised to see a bigger increase.

TSMC, for instance, is on track to increase its 2026 capital expenditures (capex) by $13 billion at the midpoint of its guidance range. Micron, meanwhile, intends to take its capex to $20 billion in the current fiscal year from just under $14 billion in the previous fiscal year, an increase of $6 billion. So, the actual jump in semiconductor equipment spending this year could be much larger than SEMI anticipates.

This could pave the way for potentially stronger growth at Applied Materials. The company's revenue in fiscal 2025 (which ended on Oct. 26) increased by 4% to a record $28.4 billion. Consensus estimates aren't projecting a major increase in Applied Materials' revenue in the current fiscal year, but they do expect its growth to pick up in the next one.

Data by YCharts.

However, don't be surprised to see Applied Materials exceeding expectations in the ongoing fiscal year, thanks to the favorable scenario in the semiconductor equipment space. With Applied Materials trading at 9 times sales right now, almost in line with the U.S. technology sector's average sales multiple, there is a chance this semiconductor stock trades at a premium multiple if it can outperform consensus estimates.

That could pave the way for more upside in this Nasdaq stock, which is why it may be a good idea to buy it before it jumps higher.

SentinelOne: AI is set to drive solid growth for this cybersecurity specialist SentinelOne (S +0.70%) had a forgettable 2025. The share price of the cybersecurity specialist fell 32% last year, as the company was unable to satisfy Wall Street's quarterly expectations. It is worth noting that SentinelOne traded down around 19% in 2024 as well.

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However, the pullback means that investors can buy this cybersecurity stock at 4.6 times sales and 38.6 times forward earnings. Doing so could turn out to be a smart move, as SentinelOne has been experiencing healthy growth in revenue and earnings, driven by the company's AI-focused offerings that are gaining traction among customers.

SentinelOne made a smart move last year by acquiring Observo AI for $225 million. The company made this move to boost its real-time threat-detection capability, contributing to SentinelOne's AI-powered Singularity product platform. Singularity is an AI-native platform that helps customers predict and address cyberthreats in advance using real-time data.

Importantly, SentinelOne management remarked on the company's December earnings call that Singularity is helping it win substantial contracts and build a robust revenue pipeline. The latest acquisition should help SentinelOne further strengthen this platform, potentially improving cross-sales opportunities and attracting new customers.

A look at the company's recent results for the third quarter of fiscal 2026 (which ended on Oct. 31) reveals that its revenue increased by 23% year over year to $259 million. Its remaining performance obligations (RPO), however, increased at a faster rate of 35% from the year-ago period to $1.3 billion.

RPO refers to the total value of contracts that a company has yet to fulfill at the end of a period. So, the bigger increase in this metric as compared to SentinelOne's revenue jump is proof that it is landing more business than it is fulfilling. The bigger contracts are also having a positive impact on its margin profile, boosting the non-GAAP (generally accepted accounting principles) net income margin to 9.6% in the previous quarter from breakeven in the year-ago period.

As such, it won't be surprising to see SentinelOne's growth outpacing expectations going forward, especially considering the impressive jump in its pipeline.

Data by YCharts.

Even better, the stock's 12-month median price target of $20.50 points toward a 48% jump from current levels, according to 39 analysts covering SentinelOne. The company could indeed achieve such gains, as it is pulling the right strings to capitalize on the AI-focused cybersecurity market, which is expected to nearly double in size this year to $51 billion, according to Gartner.

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Don't overthink the AI boom. This year's AI winners are sitting in plain sight.

It's been a little over three years since artificial intelligence (AI) became the hottest topic on Wall Street. Nothing lasts forever, but it's hard to envision the AI boom ending this year. At least, not while billions of dollars continue to flow into data centers, chips, and other AI infrastructure.

So, how is the AI space shaping up for 2026? Consensus estimates from Goldman Sachs indicate that AI companies could spend more than $500 billion on capital expenditures this year. That would be an increase of more than $100 billion from 2025.

In other words, the AI train is chugging along faster than ever. Which stocks will benefit the most from all this AI spending? Recent developments point to some familiar faces.

Here is why I predict that Nvidia (NVDA +1.60%) and Taiwan Semiconductor Manufacturing (TSM +2.29%) will be this year's big AI winners.

Image source: Nvidia.

The top AI GPU company is launching a new chip Nvidia has grown by leaps and bounds over the past several years. Its GPU chips are the hardware of choice for AI hyperscalers, utilizing Nvidia's CUDA programming to build massive data centers where thousands of GPU chips work together as clusters to train and operate AI models.

The company's Hopper GPU architecture helped it capture the AI data center market early on. Since then, Nvidia's customers have mostly stuck with its GPUs, which have a reported market share of 85% to 90%. It's why Nvidia's revenue surged by 1,000% over the past five years, and the stock has performed similarly.

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So, why is Nvidia still a big winner this year? AI companies have already laid extensive groundwork, building primarily on Nvidia's hardware. It's hard to see that changing dramatically while the investment boom still has this much momentum. Nvidia's next-generation architecture, Rubin, recently entered full production, and the company has a $500 billion backlog extending through 2026.

That should set the stage for continued growth at Nvidia. The stock's current price-to-earnings ratio of 45 still offers excellent value, especially given analyst estimates for 36% annualized earnings growth over the long term. Unless the AI boom falls off overnight, Nvidia is likely to continue its winning ways this year.

The leading foundry continues to capture AI growth Investors can follow the AI chip breadcrumbs to this next winner. Nvidia and most other chip companies don't actually manufacture anything. Instead, they outsource production to foundries. Taiwan Semiconductor Manufacturing, also known as TSMC, is the world's leading foundry, with an estimated market share of 72%. Its next-closest competitor controls just 7% of the market.

TSMC's dominance stems from some serious competitive advantages. It has advanced manufacturing techniques and higher factory capacity, making it difficult for other foundries to compete with TSMC, especially in high-end chips used in AI data centers. TSMC's market share has gradually increased over the past few years as the AI chip market has exploded.

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The company recently posted a stellar earnings report and is increasing capital expenditures to $52 billion-$56 billion in 2026, up from $41 billion in 2025. It's a strong signal that TSMC sees more growth on the horizon, as global AI chip demand primarily funnels through its factories. Analysts now see the company growing earnings by nearly 30% annually over the next three to five years.

TSMC was a red-hot stock last year, surging more than 53%. However, it seems that investors still aren't appreciating TSMC's growth enough. The stock currently trades at a price-to-earnings ratio of 30, which, frankly, is a compelling valuation for a dominant business with such bright growth prospects. If investors continue to appreciate TSMC's strong performance, the stock seems likely to continue running strongly throughout 2026.

HomeDividends AnalysisREITs Analysis

SummaryAhead of the Fed meeting, U.S. equity markets declined modestly this week as investors navigated a fresh bout of global rate volatility amid headline churn out of Davos and Japan.Markets drew relief from de-escalation in the Greenland saga, as the White House backed away from military and tariff threats after agreeing to a NATO framework enabling expanded U.S. influence.Speculation ramped up around the next Fed Chair, with BlackRock’s Rick Rieder suddenly viewed as the betting favorite, a candidate that markets view as a pragmatic and more centrist alternative.Real estate equities stumbled as renewed rate volatility reintroduced pressure on rate-sensitive sectors. Following its best week since last April, the Equity REIT Index slipped 2.3%.Prologis – the largest industrial REIT – slumped 4% despite kicking off REIT earnings season with a solid report indicating an upward inflection in logistics fundamentals in 2026 following several quarters of supply-driven headwinds.iREIT®+HOYA Capital members get exclusive access to our real-world portfolio. See all our investments here » Gian Lorenzo Ferretti Photography/E+ via Getty Images

Real Estate Weekly Outlook Ahead of a critical - and perhaps contentious - Federal Reserve rate decision, U.S. equity markets posted modest declines this past week as investors navigated a fresh bout of global rate volatility amid headline

Analyst’s Disclosure: I/we have a beneficial long position in the shares of RIET, HOMZ, IRET, ALL HOLDINGS IN THE IREIT+HOYA PORTFOLIOS 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.

Hoya Capital Research & Index Innovations ("Hoya Capital") is an affiliate of Hoya Capital Real Estate, a registered investment advisory firm based in Rowayton, Connecticut, that provides investment advisory services to ETFs, individuals, and institutions. Hoya Capital Research & Index Innovations provides non-advisory services including market commentary, research, and index administration focused on publicly traded securities in the real estate industry. This published commentary is for informational and educational purposes only. Nothing on this site nor any commentary published by Hoya Capital is intended to be investment, tax, or legal advice or an offer to buy or sell securities. This commentary is impersonal and should not be considered a recommendation that any particular security, portfolio of securities, or investment strategy is suitable for any specific individual, nor should it be viewed as a solicitation or offer for any advisory service offered by Hoya Capital Real Estate. Please consult with your investment, tax, or legal adviser regarding your individual circumstances before investing. The views and opinions in all published commentary are as of the date of publication and are subject to change without notice. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy, and it should not be regarded as a complete analysis of the subjects discussed. Any market data quoted represents past performance, which is no guarantee of future results. There is no guarantee that any historical trend illustrated herein will be repeated in the future, and there is no way to predict precisely when such a trend will begin. There is no guarantee that any outlook made in this commentary will be realized. Readers should understand that investing involves risk, and loss of principal is possible. Investments in real estate companies and/or housing industry companies involve unique risks, as do investments in ETFs. The information presented does not reflect the performance of any fund or other account managed or serviced by Hoya Capital Real Estate. An investor cannot invest directly in an index, and index performance does not reflect the deduction of any fees, expenses, or taxes. Hoya Capital Real Estate and Hoya Capital Research & Index Innovations have no business relationship with any company discussed or mentioned and never receive compensation from any company discussed or mentioned. Hoya Capital Real Estate, its affiliates, and/or its clients and/or its employees may hold positions in securities or funds discussed on this website and in our published commentary. A complete list of holdings and additional important disclosures is available at www.HoyaCapital.com.

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.

These stocks are not Wall Street favorites, but they look cheap relative to their forward growth prospects.

With the market soaring to new highs, it may seem like there are no cheap stocks to buy. At least that would be the case if you only looked at the highfliers getting all the attention on financial-focused TV networks. Artificial intelligence (AI) stocks are all the rage there, and their valuations now reflect that.

Investors looking to find cheap stocks for their portfolios in 2026 will need to look elsewhere, focusing instead on under-the-radar stocks. To help with that search, consider Sprouts Farmers Market (SFM +1.26%) and Remitly Global (RELY 0.91%).

Here's why these are my two best consumer stocks to buy right now, in part because they circumvent the AI market mania.

Image source: Getty Images.

Sprouts Farmers Market: An organic grocery niche A brand growing in popularity as it spreads around the United States, Sprouts Farmers Market has found a nice spot between the big-box retailers and regular grocery store chains. Sprouts operates grocery stores focused on organic produce, vitamins, dietary restrictions, and whole foods. It is targeting the percentage of the United States population that are health enthusiasts, have higher income, and are tired of the bland brands at big-box retailers.

This has been a nice niche for Sprouts to play in as it opens stores around the country. Last quarter, revenue was up 13% year over year to $2.2 billion, with a strong $157 million in income from operations. With fewer than 500 locations in 24 states, Sprouts has plenty of room to expand its presence around the United States, giving it a long reinvestment runway.

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As it opens new stores, revenue and earnings will grow. Along with same-store sales growth guided to be in the low single digits over the long term, this should lead to consistent double-digit revenue growth for Sprouts over the next decade. At the same time, it is returning cash to shareholders through share repurchases, bringing outstanding shares down 17% cumulatively over the last five years.

The stock has been in a significant drawdown over the past several months due to a slowdown in same-store sales growth, which has gone from 12% last year down to a guidance for 0%-2% in the fourth quarter. The higher the same-store sales growth, the better, but Sprouts Farmers Market is simply lapping its overly strong traffic period from 2024 and should still be able to maintain its long-term guidance of an average of low single-digit comparable store sales growth over the coming years.

Sprouts is now trading at a price-to-earnings (P/E) ratio of 13.8. This is not only cheap compared to its growth potential, but will allow the company to repurchase more stock at a dirt cheap price, making Sprouts Farmers Market an even better buy the lower the stock goes.

Remitly Global: Fighting a narrative in cross-border payments The second stock that looks mighty cheap right now is Remitly Global, a leading disruptor in cross-border payments that was founded specifically to aid immigrants in the United States sending money back to friends and family in other countries. With news of stablecoins being used more by current and potential customers, combined with increased crackdowns on immigrants in the United States, some investors are spooked, and Remitly's shares are trading down nearly 39% over the past year.

While investors should keep a close eye on these potential headwinds, they are not showing up in Remitly's financial performance at the moment. Last quarter, revenue grew 25% year over year, driven by a 35% increase in send volume to $19.5 billion. With over $1 trillion in cross-border payments from individuals each year (and growing), Remitly is only a small sliver of the sector at the moment. Plus, this doesn't include its new foray into small business customers, which is an even larger market opportunity.

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Today, Remitly is barely profitable, posting net income of $8.8 million last quarter. However, the business has great unit economics and gross margins while trading at a price-to-sales (P/S) ratio under 2. For a company expecting to grow revenue in the high teens with a lot of market share left to capture, this is a cheap stock valuation.

Or, put another way, the stock has a market cap of under $3 billion, with guidance for $600 million in adjusted earnings power by 2028. That is only a 5x earnings multiple three years into the future, again showing how cheap Remitly shares are right now for investors planning to buy and hold for the long haul.

HomeDividends AnalysisDividend IdeasFinancials 

SummaryI am calling Aflac (AFL) a buy again, driven by strong profit margins, organic insurance policy growth in the US and Japan, and an attractive balance sheet risk profile. Some metrics indicate a premium valuation but one that can be justified by sector-leading margins and low benefit ratios, as well as also expected further price appreciation/upside. Dividend growth has been positive, along with a low 29.9% payout ratio and a decade of steady increases, supporting AFL as a reliable dividend income idea. Key risks include elevated sector-wide cyber threats, which have been discussed. CHOLTICHA KRANJUMNONG/iStock via Getty Images

Today's Stock Pick: An Insurance Brand That Keeps Quacking Lately, I've been talking a lot about the role of risk management in analyzing stocks, so today's article focuses on a sector whose business is literally risk

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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.

The author does not currently invest in any stocks in the insurance sector.

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.

Realty Income is a forever holding for me.

I own several real estate investment trusts (REITs). They provide me with passive income that I can reinvest and typically increase in value as they grow their earnings and dividends.

One REIT I plan to buy more of in 2026 is Realty Income (O 0.18%). I view it as a forever holding that I never intend to sell. Here's why.

Image source: Getty Images.

Built for a lifetime Realty Income has grown from a single restaurant property in 1969 to a global real estate behemoth with over 15,550 properties across North America and Europe. The company hasn't only grown bigger over the years; it has grown into a better company. It has steadily diversified its platform over the years by adding new geographies, property types, and investment platforms. That diversification has reduced its risk profile while enhancing its growth prospects.

The REIT has grown in size without risking its financial strength. It boasts one of the 10 best credit ratings in the sector. It also maintains a conservative dividend payout ratio (less than 75% of its adjusted funds from operations). Maintaining a fortress financial profile has allowed it to weather the inevitable storms impacting the global economy and real estate sector. As a result, Realty Income has never had to reduce its dividend payment in its more than 30 years as a public company. Instead, the REIT has increased its dividend 133 times since its public market listing in 1994.

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That steady dividend growth should continue. Realty Income estimates its total addressable investment opportunity is $14 trillion. The company's diversification gives it the flexibility to invest where it sees the best opportunities. For example, it recently established a joint venture to invest over $1.5 billion into developing high-quality logistics real estate. It also recently made its first investment in Mexico and expanded its gaming portfolio through another credit investment.

Realty Income built its business to provide investors with a durable, steadily rising monthly dividend. That's why I plan to hold it forever and collect a lifetime of passive income.

Matt DiLallo has positions in Realty Income. The Motley Fool has positions in and recommends Realty Income. The Motley Fool has a disclosure policy.

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Nobody wants a landfill in their backyard, which is exactly why the companies that own them print money. The waste management industry is an oligopoly disguised as a utility. Garbage never stops, permits for new landfills are nearly impossible to obtain, and the handful of players controlling North America’s disposal infrastructure enjoy pricing power that makes telecom companies jealous. These stocks compound predictably through recessions, inflation cycles, and regulatory shifts.

5. GFL Environmental Holdings (NYSE:GFL) GFL Environmental Holdings (NYSE:GFL) is the roll-up story. The Canadian giant went public in 2020 backed by private equity and has been aggressively acquiring smaller haulers across North America. Revenue hit $8.2 billion over the trailing twelve months with 9% year-over-year growth in Q3 2025. The company operates beyond basic trash collection, offering soil remediation, liquid waste services, and infrastructure support.

The challenge is execution. GFL trades at 261x trailing earnings despite a more reasonable 53x forward multiple. Operating margins sit at 10.5%, well below peers, and return on equity is just 1.6%. The levered balance sheet amplifies both upside and downside. Institutional ownership at 99.7% shows sophisticated money believes in the consolidation thesis. GFL is the highest-risk, highest-potential-reward play in the sector if management can integrate acquisitions and improve profitability.

4. Casella Waste Systems (NASDAQ:CWST) Casella Waste Systems (NASDAQ:CWST) is the regional specialist. Focused on the Northeast US, the company generated $1.8 billion in trailing revenue with 17.9% year-over-year growth in Q3 2025. At $6.7 billion in market cap, it’s the smallest player here but growing faster than anyone. Quarterly earnings jumped 60% year-over-year, demonstrating operational leverage as the company scales.

The valuation is extreme. Casella trades at 441x trailing earnings, though the forward multiple of 106x suggests near-term improvement. Operating margins of 7% and profit margins under 1% show the company is still in development mode, investing heavily in route density and landfill capacity. President Edmond Coletta sold 7,000 shares at $100.07 in December, while CFO Bradford Helgeson sold 262 shares at $87.65 in November. The stock is up 8% year-to-date through January 23, 2026, but flat over the past year. Casella offers growth potential if consolidation in fragmented northeastern markets drives margin expansion.

3. Waste Connections (NYSE:WCN) Waste Connections (NYSE:WCN) targets secondary and tertiary cities where it can operate without head-to-head competition from larger rivals. Revenue reached $9.4 billion with 19.3% operating margins. The Canadian-based company serves both US and Canadian markets, providing geographic diversification.

WCN trades at 71x trailing earnings despite earnings declining 6.7% year-over-year in Q3 2025. The forward multiple of 22x suggests the market expects a sharp rebound. Return on equity of 7.6% is modest for a company commanding this valuation. Dividends have grown consistently, with the quarterly payout increasing from $0.315 to $0.35 in late 2025, representing 11% growth. Four senior operations executives purchased shares at $166.59 on December 31, 2025, offset by significant selling, including 9,000 shares by Director Edward Guillet at $174.44 in October. The stock is down 4.4% over the past year. WCN’s exclusive markets provide a moat, but the valuation assumes flawless execution.

2. Republic Services (NYSE:RSG) Republic Services (NYSE:RSG) is the disciplined operator. With $16.5 billion in trailing revenue and $67.9 billion in market cap, it’s the clear number two behind Waste Management. Operating margins of 19.9% and profit margins of 12.8% exceed larger rival WM. The company’s RISE digital platform generated $60 million in incremental revenue in its first year by identifying overfilled containers and recycling contamination through route cameras.

Republic is investing heavily in sustainability. Seven new renewable natural gas projects are expected online in 2025, contributing $70 million in incremental revenue and $35 million in EBITDA. The company operates 52 electric collection vehicles with plans to exceed 150 by year-end 2025. Management raised dividends from $0.58 to $0.625 per quarter in late 2025, marking 7.8% growth. The stock is up 3.6% over the past year and 3% year-to-date through January 23, 2026. Insider activity in January 2026 showed coordinated equity grants across the C-suite. Republic trades at 32x earnings with an analyst target of $244.21, offering steady compounding without WM’s premium.

1. Waste Management (NYSE:WM) Waste Management (NYSE:WM) is the undisputed king. With $92.4 billion in market cap and $24.8 billion in trailing revenue, it owns over 250 landfills across North America. These are irreplaceable assets. Building new landfills near population centers is functionally impossible due to permitting opposition, giving existing operators monopoly-like pricing power. WM’s landfill volumes grew 5.2% in Q3 2025 with 6.7% pricing on municipal solid waste.

The company achieved record 38.4% operating EBITDA margins in its collection and disposal business during Q3 2025, with the legacy WM operation hitting 32% margins for the first time in company history. Management expects free cash flow approaching $3.8 billion in 2026 as sustainability investments wind down and fleet capital normalizes. Return on equity sits at 29.3%, far exceeding peers. WM pays $3.30 annually in dividends with over 10 consecutive years of increases, validating its Dividend Aristocrat status. The stock is up 10.7% over the past year and 4.3% year-to-date through January 23, 2026.

Renewable natural gas production doubled in the first nine months of 2025, with 45% of 2026 offtake presold. Recycling EBITDA grew 18% despite commodity prices falling 35%, proving automation investments are working. WM trades at 36x trailing earnings with a forward multiple of 27x. CFO David Reed acquired 2,628 shares and Director Sean Menke purchased 2,000 shares at $196.42 in November 2025.

The Landfill Advantage Waste management isn’t sexy, but it’s structurally advantaged. Landfill scarcity creates pricing power. Essential service revenue streams survive recessions. Inflation-linked contracts provide automatic raises. The top three players control the game, and all five companies here benefit from ongoing consolidation of fragmented local haulers. Waste Management leads with irreplaceable assets and execution. Republic offers similar quality at a lower multiple. The others provide growth angles with corresponding risks.

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Time to upgrade Uber Technologies to a buy, with risk/reward now favoring the stock ahead of Q4 earnings. UBER maintains a strong platform moat and sector-leading profitability, despite looming long-term robotaxi threats from Tesla and Waymo. Robotaxi disruption is unlikely to materially impact UBER's economics before the decade's end, with AVs projected at only 7.5% market share by 2030.

HomeStock IdeasLong IdeasHealthcare 

SummaryAbbott Laboratories is rated 'Buy,' following a recent price drop, driven by Nutrition segment weakness and COVID-19 diagnostics decline.ABT's Medical Devices segment, especially CGM, continues to deliver robust double-digit growth, offsetting Nutrition softness.Management guides for 7% sales and 10% EPS growth in 2025, underpinned by innovation and normalization in Nutrition.Trading at a forward P/E of 18.9, versus a 10-year average of 24.5, ABT offers attractive risk-reward, with strong balance sheet and dividend growth.Looking for a portfolio of ideas like this one? Members of iREIT®+HOYA Capital get exclusive access to our subscriber-only portfolios. Learn More » z1b/iStock via Getty Images

Earnings season can be a great time to take advantage of market irrationality, especially when short-term investors on Wall Street hit the panic sell button on otherwise well-rounded companies. This creates opportunities for long-term retail investors who

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in ABT over the next 72 hours. 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.

I am not an investment advisor. This article is for informational purposes and does not constitute as financial advice. Readers are encouraged and expected to perform due diligence and draw their own conclusions prior to making any investment decisions.

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.

DETROIT — The only consistency has been inconsistency for the U.S. automotive industry during the first half of this decade — a trend that's expected to continue amid challenging market conditions in 2026.

The U.S. auto sector — a crucial driver of the economy estimated around 4.8% of America's gross domestic product — has endured rolling crises since the Covid-19 pandemic shuttered U.S. assembly plants in early 2020. The global health crisis was followed by yearslong supply chain issues, semiconductor chip shortages, political whipsawing, tariffs and other challenges for all-electric and autonomous vehicles.

Automakers have been surprisingly resilient during the challenges, but those issues are now combining with more traditional industry problems of affordability and slowing consumer demand. That's all creating a more challenging environment for automakers in 2026.

"We've got to plan for the worst and hope for the best," Hyundai North America CEO Randy Parker told CNBC during an interview. "That's the situation that we're in right now."

Other executives have expressed similar sentiments as they prepare for a "new" U.S. automotive industry: one that's more expensive, smaller and, by many means, less predictable.

Automotive forecasters are calling for steady to lower sales this year, despite industry sales only hitting 16.3 million units last year. That was the highest level since the pandemic in 2020, but down from more than 17 million for five consecutive years before the global health crisis, according to industry data.

"Anyone in the auto industry … we should all be very careful about consumer demand," Ford Motor CEO Jim Farley said Jan. 13 during an event for the Detroit Auto Show. "That's really important."

'Affordability crisis'One of the largest industry issues — and one that's a culmination of many factors — is the affordability of new vehicles.

New vehicles prices have climbed; the average transaction price was hovering around $50,000 toward the end of last year, up 30% from less than $38,747 to begin 2020, according to Cox Automotive.

Average transaction prices historically increased on average 3.2% year-over-year, but from 2020-2022 that average nearly tripled to 9%.

"Pandemic-induced production constraints and supply chain chaos didn't just disrupt the market temporarily. They fundamentally restructured pricing dynamics. This elevated plateau is now the new baseline, which has the market anchored at these higher price points," said Erin Keating, Cox Automotive senior director of economic and industry insights.

It's not just vehicle prices hitting consumers' wallets either. They're also dealing with inflation, increases in maintenance and repairs, and 13% annual average increases for insurance over the past five years, according to Cox Automotive.

"The cumulative weight of all these increases has pushed total vehicle ownership costs beyond reach for many middle- and lower-income households, constraining market access and accelerating the affordability crisis," said Cox Automotive interim chief economist Jeremy Robb.

Cox Automotive reports it took 33.7 weeks of median household income to buy the average new vehicle in November 2019. Now it's 36.3 weeks. That's down from a record high of 42.2 weeks during the pandemic, but still means vehicles cost thousands of dollars more than historic levels.

David Christ, Toyota Motor's U.S. sales chief, warned that the current tariff and trade environment will cause prices to continue to increase this year, despite the concerns.

"On our end, we're just taking it month-to-month, and we're watching the competitors closely," Christ said on a call with reporters earlier this month. "But we feel prices are going to go up for us and for our competitors." 

To combat the slower sales and affordability challenges, Toyota and other automakers have said they will refocus on lower-priced vehicle models — a change from recent years when automakers prioritized their most expensive, highly profitable vehicles during supply chain shortages.

"Every automaker must face the reality that the American market has changed for the foreseeable future," said Lance Woelfer, head of American Honda Motor's U.S. sales.

For Honda, Woelfer said that means increasing production on less expensive trims as well as focusing on certified pre-owned vehicles, which are used but backed by company warranties. For others, such as Ford, that could include reentering abandoned segments such as sedans, according to its CEO.

"Never say never," Farley told reporters during the event in Detroit. "The sedan market is very vibrant. It's not that there isn't a market there. It's just we couldn't find a way to compete and be profitable. Well, we may find a way to do that."

Ford sells sedans outside of the U.S. but exited the domestic market with the cancellation of the Michigan-made Fusion in 2020. It also eliminated the larger Taurus sedan and smaller Ford Fiesta and Ford Focus before that.

Ford's crosstown rivals General Motors and Stellantis have largely exited the traditional U.S. sedan market as well.

Affordability concerns are generating attention from outside the automotive industry as well. A Senate committee led by Sen. Ted Cruz, R-Texas, requested a hearing with CEOs from Ford, GM and Stellantis about affordability and other issues in the automotive industry. The hearing was scheduled for Jan. 14 but was postponed amid scheduling conflicts and general pushback from Ford about Tesla CEO Elon Musk not attending the meeting, according to a letter from the company to the subcommittee that was obtained by Politico.

'Prepared for surprises'Automakers are also bracing this year for potentially volatile U.S. regulations and trade negotiations, such as the upcoming renegotiating of the United States-Mexico-Canada Agreement that's scheduled for later this year.

Currently, automakers can import new vehicles from South Korea or Japan with lower tariffs than from Canada or Mexico, depending on their U.S. content. The Trump administration has reached trade deals on vehicles with those Asian countries but not its neighbors to the north and south.

Depending on the outcome of those discussions, USMCA could be a tailwind for automakers that have a lot of production in the U.S.

"Looking to 2026, our cycle work would suggest that autos would have a difficult time outperforming given a relatively flat y/y volume outlook. However, we see reasons for optimism for US [automakers]," UBS analyst Joseph Spak wrote last month in an investor note.

Wall Street will begin getting its first outlooks from automakers this week beginning with GM announcing its fourth quarter and year-end earnings on Tuesday, followed by Tesla on Wednesday.

GM CEO Mary Barra earlier this month reconfirmed that the automaker expects 2026 will be better than 2025.  

GM's 2025 guidance included adjusted earnings before interest and taxes of between $12 billion and $13 billion, or $9.75 to $10.50 adjusted EPS, and adjusted automotive free cash flow of $10 billion to $11 billion, up from $7.5 billion to $10 billion.

But depending on the automaker, Wall Street analysts expect mixed results for the U.S. industry as it continues to deal with uncertain times.

"It is hard to imagine how 2026 could bring more external shocks and share price divergence than 2025 but, with no visible end to industry disruption, we are also prepared for surprises, impairments and strategic shifts," Jefferies analyst Owen Paterson said in an investor note this month.

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© Courtesy of Agnico Eagle Mines Limited

The iShares MSCI Global Metals & Mining Producers ETF (NYSEARCA:PICK) has surged 66% over the past year, climbing from roughly $35 to $58 per share. That rally reflects renewed optimism around industrial metals, particularly copper and iron ore, as infrastructure spending and energy transition projects drive demand. With over $1.2 billion in assets and a 0.39% expense ratio, PICK offers broad exposure to mining giants like BHP Group (NYSE:BHP), Rio Tinto (NYSE:RIO), and Freeport-McMoran (NYSE:FCX), which together account for nearly a quarter of the portfolio. The question now is whether this run can continue or if headwinds are building.

The Macro Driver: China’s Economic Trajectory The single biggest factor affecting PICK is China’s economic health. China consumes roughly half of the world’s copper, iron ore, and steel, making its industrial activity the primary demand driver for metals PICK’s holdings produce. When China’s property sector weakens or manufacturing slows, commodity prices soften, dragging mining stocks lower. Conversely, stimulus measures or infrastructure pushes can ignite rallies.

Investors should monitor China’s monthly Purchasing Managers’ Index data, released by the National Bureau of Statistics around the first of each month. A PMI above 50 signals expansion; below 50 indicates contraction. Also watch announcements from China’s National Development and Reform Commission regarding infrastructure spending and property sector support measures. These releases provide early signals of demand shifts that directly impact the diversified miners and copper producers dominating PICK’s portfolio.

Historically, PICK has tracked closely with Chinese industrial cycles. During the 2020-2021 infrastructure boom, the ETF more than doubled. When property development stalled in 2022, it gave back much of those gains.

The Micro Factor: Copper Concentration and Price Sensitivity PICK’s portfolio is heavily tilted toward copper exposure through holdings like Freeport-McMoran, which has gained 53% over the past year, and Glencore (NASDAQ:GLNCY). Copper prices directly influence these companies’ earnings and stock performance. Unlike diversified materials ETFs, PICK’s concentrated bet on mining means copper price swings create outsized portfolio effects.

Copper’s role in electrification and renewable energy infrastructure makes it sensitive to policy shifts and project timelines. Delays in grid buildouts or changes in clean energy subsidies can dampen demand expectations quickly. Investors should review PICK’s monthly holdings file on the iShares website to track any rebalancing toward or away from copper-heavy names, and monitor quarterly earnings reports from Freeport-McMoran and BHP for commentary on copper pricing trends and production guidance.

The key takeaway: PICK’s next 12 months hinge on China’s industrial demand trajectory and copper price stability driven by electrification project momentum.

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Artificial intelligence (AI), robotics, and automation could reshape the retail industry.

Amazon (AMZN +2.12%) currently has a market capitalization of approximately $2.5 trillion and ranks as the world's fifth-largest company. The tech giant leads the market in categories including e-commerce and cloud infrastructure services. It also operates a fast-growing digital advertising business.

Despite the company's many strengths, Amazon has actually significantly underperformed the broader market over the last half-decade. The company's share price has risen roughly 44% over the last five years, but the S&P 500 and the Nasdaq Composite have risen 79% and 73%, respectively.

While Amazon stock has been a market laggard over the last five years, there's at least one big reason to think things will be different over the next five.

Image source: Getty Images.

Amazon is likely in the early stages of tapping into an incredible profit driver Amazon Web Services (AWS) continues to be Amazon's biggest profit generator. The company's market-leading cloud-infrastructure service boasts impressive margins and has kept growing at an encouraging pace. AWS revenue increased 20% year over year in last year's third quarter, and it accounted for $11.4 billion of the company's $21.7 billion in non-GAAP (generally accepted accounting principles) adjusted operating income (almost 53%). Meanwhile, the AWS segment accounted for just $33 billion of the company's $180.2 billion in Q3 revenue (about 18%).

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Amazon's e-commerce business continues to generate the large majority of overall sales, but the high costs associated with the online retail business mean that profit margins remain far below what the company's cloud and advertising businesses are delivering. The online retail business will remain relatively capital-intensive compared to those divisions, but there's also a good chance that it will see powerful margin gains over the next five years and beyond.

As advances in artificial intelligence (AI) continue to strengthen robotics and automation technologies, Amazon's e-commerce business could see dramatic margin improvements. The company has made big investments in warehouse automation and autonomous delivery technologies, and these bets appear to be in the very early stages of paying off.

Amazon stands as the world's second-largest company by revenue, trailing behind only Walmart in the category. Based on recent sales trends, Amazon also looks poised to become the biggest company by revenue within the next couple of years.

As AI, robotics, and automation trends continue to evolve, there's a good chance that margins for Amazon's e-commerce business will march well above current levels. Improved profitability for its biggest revenue stream could help Amazon stock deliver market-crushing performance over the next five years and beyond.

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Walmart. The Motley Fool has a disclosure policy.

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The coming week will put Big Tech earnings and the Federal Reserve firmly in focus, with markets bracing for key signals on growth, inflation, and policy direction. Apple (AAPL), Microsoft (MSFT), and Meta Platforms (META) headline a heavy earnings calendar, alongside results from Tesla (TSLA), Boeing (BA), Visa (V), Mastercard (MA), Exxon Mobil (XOM), and Chevron (CVX). Microsoft’s report will be closely watched for updates on AI-driven Azure growth and margins, while Apple’s results should offer insight into iPhone demand and its slower-moving AI strategy

The Fed’s interest rate decision midweek is expected to be the macro centerpiece, with investors parsing Chairman Jerome Powell’s press conference for clues on the timing and pace of future easing. Markets will also track consumer confidence, durable goods orders, jobless claims, PPI data, and the Chicago PMI for confirmation on the inflation and growth outlook

Beyond earnings and the Fed, catalysts include several fintech IPOs, key M&A shareholder votes, and notable Investor Days, adding to what shapes up as a potentially volatile week for markets

Earnings spotlight: Tuesday, January 27: Boeing (BA), UnitedHealth (UNH), Texas Instruments (TXN), RTX Corp (RTX), General Motors (GM). See the full earnings calendar.

Earnings spotlight: Wednesday, January 28: Microsoft (MSFT), Meta Platforms (META), Tesla (TSLA), IBM (IBM), AT&T (T). See the full earnings calendar.

Earnings spotlight: Thursday, January 29: Apple (AAPL), Visa (V), Mastercard (MA), Caterpillar (CAT). See the full earnings calendar.

Earnings spotlight: Friday, January 30: Exxon Mobil (XOM), Chevron (CVX), American Express (AXP), Verizon (VZ). See the full earnings calendar.

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This exclusive forum brings together some of Seeking Alpha’s most respected Investing Group leaders—Andres Cardenal, Beth Kindig, Samuel Smith, and Steven Bavaria—as they share their highest-conviction stock ideas and actionable strategies for the year ahead.

Discover where growth and income opportunities are shaping up in 2026, how top investors are evaluating fundamentals, and ways to navigate market volatility with greater confidence.Registration is free!

More about the panelists:

Beth Kindig is a veteran technology analyst with 14+ years of experience and a proven track record of identifying major tech winners years ahead of consensus. As founder of Tech Insider Network, she leads one of the top-performing audited tech portfolios and empowers investors with institutional-grade AI and tech research. She is supported by a seasoned team, including Portfolio Manager Knox Ridley, a specialist in technical analysis and risk management, along with equity analysts Royston Roche and Damien Robbins, who bring deep expertise in fundamental and thematic tech research.

Andres Cardenal has been investing in AI from its infancy. Staying ahead of the technology curve seems to be built into his DNA. Through his Investing Group, The Data Driven Investor, Andres has beaten key tech benchmarks like Cathie Wood's ARK Innovation ETF (ARKK) by a cumulative 78% going back to 2018. This is achieved via high-conviction, well-researched long-term growth ideas and disciplined risk management picked up during Andres' 25 years working with hedge funds, family offices, and asset managers across the Americas.

Steven Bavaria brings over 50 years of experience in banking, credit, journalism, and investing to his Investing Group, Inside the Income Factory. Members learn how to grow wealth by reinvesting income using real portfolios, market insights, and community discussions. His strategy focuses on dependable cash flow through credit assets such as high-yield bond funds, CEFs, BDCs, and CLOs, based on his belief that long-term returns ultimately follow income.

Samuel Smith launched High Yield Investor in 2020 to prove dividend investors can achieve both strong income and meaningful growth. The service offers three purpose-built portfolios: Core, International, and Retirement—designed to balance stability, upside, and dependable yield. A West Point graduate, Samuel partners with Jussi Askola and R. Paul Drake to deliver deep analysis, real-money portfolios, timely trade alerts, and ongoing education, fostering a highly engaged, strategy-focused investor community.

If you’re looking to stay ahead of the curve and learn directly from top market practitioners, this is an event you won’t want to miss. Register Now!

In case you missed it

Starbucks enters earnings after years of stagnation, with China disappointing, U.S. traffic under pressure, and no clear growth engine in sight. Coffee, sugar, and labor inflation are squeezing margins just as consumers trade down, limiting Starbucks' ability to price its way out. Dividends keep rising even as cash flow weakens, pushing leverage higher and raising uncomfortable questions about sustainability.

This leading cruise operator has been a positive contributor to portfolios in recent years.

Despite being decimated during the depths of the COVID-19 pandemic, Carnival Corp. (CCL +0.21%) (CUK +0.28%) kept sailing.

The water was rough and choppy. However, now the sea is calm. And this business is operating at a high level. Its stock price is up 169% in the past three years.

Where will Carnival shares be three years from now? Here are three reasons to believe they'll be trading at much higher levels.

Image source: Carnival.

1. Durable demand in the cruise industry The cruise industry overall is positioned well to continue growing. Cruise trips can usually be 25% lower than the cost of land-based alternatives, providing a notable value proposition for consumers who might be feeling the pinch in today's macro environment. The industry is drawing in younger customers, as well as those who have never been on a cruise before, essentially expanding the market opportunity.

Carnival has been thriving. During each quarter of fiscal 2025 (ended Nov. 30), the company reported record revenue; net yields (a proxy for pricing power); adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA); operating income; and customer deposits. And nearly two months ago, Carnival said that two-thirds of its 2026 schedule was already booked up.

2. Financial improvements to the business As Carnival's revenue climbed from the worst days of the health crisis, it has gotten to experience operating leverage. The result has been impressive profits. The company's adjusted net income soared 60% year over year to $3.1 billion in Q4. Generating more profits is undoubtedly an encouraging trend, but it's just part of the story.

Carnival's leadership team is focused on taking its improving income statement and translating that to a stronger balance sheet. This means steadily reducing long-term debt, which stood at $26.6 billion at the end of Q4. That's down $10 billion from the peak in early 2023. Should Carnival continue on its current path, investors can be confident that the debt burden will be lower in three years.

This reduces financial risk. And it can support earnings power. Management expects $700 million in net interest expense reductions in fiscal 2026 compared to fiscal 2023.

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3. Investors can benefit from valuation upside Even though Carnival's share price has soared in the past 36 months, the stock doesn't look expensive today. The market is asking prospective investors to pay a forward price-to-earnings ratio of 11.3 to buy the company. That's a sweet deal when you consider the records Carnival keeps breaking with its key metrics.

There's a very good chance that if you buy this travel stock right now, it will outperform the broader market over the next three years. Just don't expect another 169% gain.

AGNC Investment has a huge dividend yield, but you shouldn't buy it for the yield alone, or you could end up disappointed.

Some real estate investment trusts (REITs) are very clear about their dividend goals. For example, Realty Income specifically states that it is "committed to providing our shareholders with dependable monthly dividends."

AGNC Investment (AGNC +0.51%) is a bit more circumspect, stating that it is trying to provide "favorable long-term returns for our stockholders through substantial monthly dividend income." There is an important difference between these two statements.

The approach matters for REITs Realty Income is a traditional property-owning REIT. It buys physical properties and then charges tenants rent, as you would if you owned a rental property. The difference is that Realty Income operates on a much larger scale, with more than 15,500 properties in the U.S. and Europe.

Image source: Getty Images.

Realty Income prides itself on its reliable dividends, even trademarking the nickname "The Monthly Dividend Company." It has increased its dividend annually for 30 consecutive years. If you are looking to create a reliable income stream, it's the type of stock you will want to examine, with its attractive 5.3% yield right now.

AGNC's yield is 12.2%, more than twice as high as Realty Income's. That might entice some investors to consider AGNC over the other, especially since they are both REITs.

Except that AGNC isn't a property-owning REIT; it is a mortgage REIT (mREIT). And that changes the investment equation in a big way.

AGNC Investment is focused on total return AGNC manages a portfolio of mortgage securities. These are bond-like assets that have been created by pooling together mortgages. Its business is very similar to that of a mutual fund. The company even reports tangible book value per share, which is roughly akin to the net asset value (NAV) provided by mutual funds.

The mREIT is basically always managing its mortgage security portfolio as it tries to maximize total returns for shareholders. You can argue that property-owning REITs are doing something similar. But properties aren't as easy to buy and sell, so they tend to be held for much longer periods of time.

And property portfolios need to be operated on a day-to-day basis, while mortgage securities aren't that way at all. They are just passing mortgage payments through to their owners, so there's nothing for the bondholders to "operate."

And, perhaps more importantly, AGNC's focus on total returns requires the reinvestment of dividends. That's a problem for shareholders looking for a consistent or growing income stream.

AGNC data by YCharts.

As the chart above highlights, AGNC has achieved its total-return goal. In fact, since its initial public offering, it has actually outperformed the S&P 500 index on a total return basis. What the graph also shows, however, is that it has not provided a consistent and growing dividend. The payout has been highly volatile, and during the past decade, it has been trending lower. The stock price has headed lower with the dividend.

Make sure you know what you are buying AGNC  is a well-run mREIT that has been rewarding for those who have reinvested their dividends in search of a high total return. If, however, you had spent the dividends on living expenses, you would have ended up with less income and less capital. That would likely be seen as a bad outcome for most dividend investors.

If you are looking for total return, AGNC Investment is worth a deep dive. If, however, you are looking for reliable, growing dividends for income, go with a property-owning REIT like Realty Income. You will have to give up some yield, but you will likely be much happier with your outcome.

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