Growth drivers for stocks in second half of 2026

Key Concepts

• Hyperscalers: Large-scale cloud providers (e.g., Google, Microsoft, AWS) driving massive capital expenditure in AI infrastructure.
• Agentic AI: AI systems capable of autonomous decision-making and task execution, increasing demand for software and code generation.
• Take-or-Pay Contracts: Long-term agreements where a buyer must pay for a minimum quantity of goods (like industrial gases) regardless of actual consumption, ensuring revenue stability.
• LNG (Liquefied Natural Gas): A critical energy commodity where infrastructure expansion and repair are currently high-priority investment areas.
• Geopolitical Premium: The additional cost or value assigned to assets (like oil) due to the risk of conflict or instability.

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1. Market Outlook: The AI Boom vs. Energy Crisis

Jonathan Low, Portfolio Manager at Ninepoint Partners, identifies two primary drivers for the first half of the year: the energy crisis and the AI boom.

• AI Momentum: The AI sector remains a primary catalyst for earnings growth. Low highlights that hyperscalers have committed approximately $720 billion in CapEx for the year, representing roughly 2.5% of US GDP. This spending is fueling a broad ecosystem, including power providers, cooling systems, chip manufacturers, and software infrastructure companies.
• Energy Outlook: While the immediate volatility of the energy crisis is subsiding, Low argues for a "higher floor" for oil prices—specifically targeting $80 per barrel. This is supported by the need to replenish strategic petroleum reserves and the persistence of a geopolitical risk premium.

2. The "Certainty" Factor in AI

Low explains why the AI trade remained resilient despite geopolitical conflicts (e.g., in Iran). Investors gravitated toward AI because it offered certainty. Hyperscalers possess significant free cash flow and have publicly committed to sustained, long-term infrastructure spending. For example, Google’s recent equity raise specifically to fund AI infrastructure expansion serves as evidence of this unwavering commitment.

3. Broadening the AI Trade

The AI investment theme is expanding beyond pure-play chipmakers into the "infrastructure layer of software." As the use of agentic AI increases, the demand for automated code generation and software infrastructure grows, creating new opportunities for a wider range of companies. However, Low notes that the pace of this "broadening out" is sensitive to macroeconomic signals, such as Federal Reserve interest rate policies.

4. Strategic Stock Picks and Real-World Applications

Linde (Industrial Gas Producer)

• Business Model: A leader in on-site gas production with highly stable, long-term "take-or-pay" contracts.
• Growth Drivers:
  • Semiconductors: 35% of their backlog is tied to chip production, directly benefiting from the AI boom.
  • Space Exploration: Linde is the dominant supplier for launch fuel. Notably, they supply SpaceX at Starbase. Low emphasizes that the transition from the Falcon 9 to the Starship vehicle requires 10 times more gas, providing a significant growth tailwind for the company.

Technip Energies (French Engineering Firm)

• Business Model: Specializes in energy infrastructure, particularly LNG.
• Investment Thesis: Technip holds a strong incumbency in Qatar, specifically regarding the Ras Laffan LNG plant.
• Recovery Play: Following damage to the Ras Laffan plant (which left 17% of production offline for 3–5 years), Technip is positioned to secure critical repair and reconstruction contracts. Low views this as a prime beneficiary of regional stabilization and infrastructure rebuilding.

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5. Synthesis and Conclusion

The market is transitioning from a period of crisis-driven volatility to one defined by structural growth themes. The AI boom is not a short-term trend but a massive capital-intensive shift that is creating a ripple effect across energy, cooling, and software sectors. Simultaneously, the energy sector is expected to maintain a higher price floor due to supply-side constraints and strategic reserve requirements. Investors are advised to look for companies like Linde and Technip Energies, which offer a combination of defensive, resilient business models and direct exposure to high-growth secular trends like AI, space exploration, and energy infrastructure repair.