DIVERSIFY: Investment experts reveal TOP stock picks for 2026

Key Concepts

• AI Impact Beyond Tech: The primary theme is identifying companies benefiting from AI indirectly, not just those directly developing AI technologies.
• Market Valuation Caution: Several investors expressed concern about overall market valuations, leading to fewer stock picks.
• Consumer Discretionary Turnarounds: Focus on potential rebounds for established consumer brands like Nike and Starbucks.
• Luxury Goods Recovery: Anticipation of a rebound in the luxury goods sector driven by experiential spending.
• Industrials & Manufacturing: Interest in industrial companies, particularly those focused on safety, efficiency, and integration.
• Agricultural Technology: Recognition of the transformative impact of AI and technology on the farming industry.
• DoorDash’s Expansion: The potential for DoorDash to expand beyond restaurant delivery into retail and grocery services.

AI-Driven Investment Strategies: 2026 Roundtable Stock Picks

I. Overall Market Sentiment & Investment Themes

The annual investment roundtable focused on identifying stock picks for 2026, revealing a significant shift in strategy. The dominant theme was identifying companies poised to benefit from Artificial Intelligence (AI) without necessarily being direct AI developers. Investors are looking “beyond the MAGA CAP and the tech trade as a whole.” This suggests a move away from solely focusing on large-cap tech companies and exploring broader applications of AI across various sectors. However, a notable undercurrent of caution prevailed, with some panelists expressing concerns about inflated market valuations. Merrill Average, a panelist on the Berkshire Hathaway board, exemplified this sentiment, selecting only three stocks due to a belief that the market was “fully valued” and lacked opportunities for applying good value trades. Her historical performance – with no picks declining in the previous year – lends weight to her cautious approach, averaging a 27.5% return on her picks.

II. Consumer Discretionary: Turnaround Potential & Competitive Landscape

Chris Rob highlighted Nike and Starbucks as potential turnaround stories. Both are well-known consumer brands that have recently underperformed. The analysis differentiated between the two: Starbucks, under new CEO Brian Nichols (formerly of Chipotle), is focused on restoring consistent same-store sales growth. Nike, however, faces a more challenging path due to increased competition, particularly from brands like Hoka in the running shoe market. The speaker noted the ease of finding alternatives to Nike ("I can buy Amazon shorts for 30 bucks to replace my Nike ones"), contrasting this with the relatively limited competition for Starbucks ("There aren't 16 different companies of that"). This illustrates a bifurcated story within the consumer discretionary sector.

III. Luxury Goods & Experiential Spending

Jack indicated a focus on the luxury goods sector, specifically LVMH, Tiffany, and Sephora. He believes this sector is in the early stages of recovery from challenges like inflation. A key driver for this optimism is the increasing demand for experiences, which he described as “cheap” and a “bargain” compared to other forms of spending. Sephora was singled out as being “unstoppable,” with consumer demand resembling collectible items like baseball cards.

IV. Industrials & Manufacturing: Efficiency & Safety Focus

A strong emphasis was placed on industrial and manufacturing companies. Merrill Witmer’s picks, particularly Cactus (an oilfield company specializing in safer drilling technology) and RBC Bearings (a diversified industrial company with aerospace and industrial segments), exemplify this trend. Cactus is currently trading at 19 times 2026 earnings. Todd Austin Dear, a pick shared by multiple investors, represents a bet on the agricultural sector. The company is positioned to benefit from the integration of AI and technology in farming, including self-driving tractors and precision pointing systems. The speaker emphasized the dramatic changes occurring in agriculture, stating, “The way A.I. and tech is being used in farming is extraordinary my grandpa would not recognize these.”

V. DoorDash: Beyond Restaurant Delivery

DoorDash was highlighted as a company with significant growth potential beyond its core restaurant delivery business. The “bull case” for DoorDash isn’t about attracting more customers, but rather about existing customers ordering more frequently and diversifying their purchases. This includes expanding into retail items and groceries, potentially offering a comprehensive delivery service for a wider range of goods, even during events like snowstorms. The potential to order prepared food and groceries through a single platform is seen as a key growth driver.

VI. Technical Terms & Concepts

• MAGA CAP: Refers to large-cap technology companies (often associated with the acronym "Magnificent Seven").
• Value Trade: An investment strategy focused on identifying undervalued stocks.
• Same-Store Sales: A retail metric measuring the growth in revenue at stores open for at least a year.
• Aerospace Segment: A portion of a business focused on the design, development, and manufacturing of aircraft and related technologies.
• Industrial Compound: A company that consistently acquires and integrates other businesses to improve efficiency and expand market share.
• Bottom of the Cycle: The lowest point in an economic or industry cycle, often presenting a favorable entry point for investment.
• Precision Pointing: Utilizing technology (like GPS and sensors) to accurately apply inputs like fertilizer or pesticides in agriculture.

Conclusion

The 2026 investment roundtable reveals a strategic shift towards identifying companies benefiting from the pervasive influence of AI, even those not directly involved in AI development. Caution regarding market valuations is a prominent theme, alongside a focus on potential turnarounds in consumer discretionary brands, the recovery of the luxury goods sector, and the transformative impact of technology on industries like manufacturing and agriculture. The emphasis on companies like DoorDash highlights the potential for existing businesses to expand their offerings and capitalize on evolving consumer behavior. The overall takeaway is a move towards a more nuanced and diversified investment approach, recognizing the broad and often indirect impacts of AI across the economic landscape.