As we transition from a dynamic 2025 to an uncertain 2026, investors face a landscape shaped by record foreign direct investment and emerging opportunities.

Global FDI rose 14% to $1.6 trillion in 2025, yet headline FDI growth overstates recovery as a significant share flowed through financial centres, masking underlying activity.

With global growth forecast at 2.8% in 2026, driven by the US and AI investment, understanding these shifts is essential for seizing tomorrow’s wins.

2025’s Divides and Drivers

Last year’s FDI surge owed much to conduit flows: $140 billion filtered through key financial hubs. True greenfield expansions fell by 16%, reflecting hesitancy around infrastructure and renewables.

While developed economies saw a 43% jump to $728 billion, developing nations slipped 2% to $877 billion, with most least-developed countries experiencing stagnant or declining inflows.

Sector-specific trends revealed contrasting momentum. Data centres captured over 20% of greenfield value, exceeding $270 billion, fueled by AI’s insatiable power and cooling demands.

Semiconductor project values climbed 35%, underlining a strategic push for technological self-reliance, while tariff-exposed industries such as textiles, electronics and machinery contracted by 25%.

Infrastructure spending dipped 10%, and renewables saw a pullback amid policy shifts and financing constraints, signaling caution in capital-intensive builds.

Emerging Opportunities for 2026

The coming year promises a multi-year AI super-cycle, underpinned by $500 billion in anticipated AI investment, driving long-term growth across sectors.

US equities remain resilient, with small caps leading a broadening rally. Continued fiscal stimulus and tax cuts support consumption-driven expansion, projecting 2.6% domestic growth.

Emerging markets stand at a potential inflection point. India’s consumer and corporate sectors benefit from loose monetary policy and supportive fiscal measures, while China’s focus on semiconductors and biotech reignites optimism.

Europe and Japan present compelling equity plays, backed by governance reforms, self-sufficiency drives and targeted fiscal spending aimed at stimulating domestic demand.

Energy and infrastructure are poised to rebound. Clean energy infrastructure has already posted a 34% year-to-date gain, and midstream facilities for LNG and data centre power are expanding rapidly.

Sector Spotlights

Dive into the sectors commanding momentum, each offering distinct risk-reward profiles for attentive investors.

The juxtaposition of explosive AI infrastructure demand against renewable project pullbacks highlights the uneven nature of recovery and the importance of tactical allocation.

Investors should weigh the strength of utilities and traditional energy, now offering a reversal from years of underperformance, against potential volatility in nascent clean energy ventures.

Risks to Watch

Despite optimistic forecasts, several headwinds could temper gains or disrupt markets unexpectedly.

• Fragile recovery in real investment due to geopolitical tensions and policy fragmentation.
• Concentration of FDI in capital-intensive sectors may limit broad-based benefits to emerging nations.
• Rising geopolitical fragmentation and tariff risks could disrupt supply chains and dampen cross-border flows.
• Potential overinvestment in AI may pressure valuations if technological returns disappoint.
• A 35% probability of a global recession in 2026 underscores lingering macro uncertainties.

Monitoring central bank decisions, election outcomes and debt dynamics will be crucial for anticipating inflection points in market momentum.

Strategies to Capitalize

To navigate this complex terrain, investors can adopt a diversified approach that emphasizes innovation and resilience.

• Allocate to the AI value chain across sectors, including chipmakers, data centre operators and software innovators.
• Build a diversified global portfolio with exposure to emerging market debt and equities, capitalizing on policy tailwinds and a weaker dollar.
• Consider opportunistic stakes in Europe and Japan equities, supported by reform-led profitability improvements.
• Balance exposure to midstream energy and utilities, benefiting from stable cash flows and attractive valuations.
• Reserve a portion for select clean energy names, betting on long-term decarbonization mandates.

Disciplined rebalancing and a focus on fundamentals over momentum alone can protect portfolios against sharp reversals.

Outlook: Uncertain Yet Broadening

While 2026 presents a tapestry of opportunities, from technology’s frontier to infrastructure’s revival, it also harbors significant uncertainties that demand vigilance.

Coordinated policy action and multilateral cooperation could unlock fresh investment in sustainable development, bridging the gap in least-developed regions.

Ultimately, success will hinge on balancing bold, innovation-driven bets with prudent risk management, ensuring investors are positioned to thrive in a rapidly evolving market.

By aligning strategies with underlying structural shifts and grounding decisions in rigorous analysis, market participants can transform risk into reward and chart a course toward enduring momentum.