By Barbara Kollmeyer
Citrini Research urges investors to stay open-minded in the year ahead
Citrini Research says companies aren't getting enough credit by investors for shaving jobs.
Do one thing in 2026 as an investor? Be open to &#34;maybe,&#34; says a research firm whose founder who nailed diet drugs and AI themes early.
&#34;While there's a laundry list of things I wish I had done differently since the market bottomed in October 2022, I know that the only reason I've more than tripled my money since then is because I was open to maybe,&#34; says Citrini Research in its just-released trades for 2026. &#34;Maybe the hyperscalers will actually be fine if rates are higher for longer. Maybe AI isn't the next fad investors immediately get burned on.&#34;
The macro and thematic equity research group founded by investor and trend spotter James van Geelen saw positive returns - up to 75% - on nearly all of their 2025 calls. Their electronic warfare basket, at the top, surged after gains from stocks like Ondas (ONDS), Elbit Systems (IL:ESLT) and Kratos Defense (KTOS).
Here are some of Citrini's 26 ideas for 2026, starting with a basket of companies overlooked in the rush to invest in big AI players.
&#34;If 2026 is the year we see AI-driven head count reductions and productivity gains, one might expect that there would be some degree of anticipation of this AI-shift in the share price of companies spending the most on low-value, AI-threatened work. That has definitively not been the case,&#34; says Citrini.
Their screen shows how the lowest-ranking companies in terms of &#34;net income per employee&#34; that are also cutting head count have underperformed versus the S&amp;P 500:
They also expect bigger corporations will play catch up when they see competitors laying off. Among potential beneficiaries: CGI (GIB), Avery Dennison (AVY), IBM (IBM), Booz Allen Hamilton (BAH) and Cognizant Technology (CTSH).
Citrini also looks at on-device AI - running AI models locally on a device rather than waiting for queries to come back from a datacenter - winners and losers. Discussing the bull and bear case for &#34;always-on&#34; AI agents, they say the bottom line is that memory will be essential and expensive and to expect bottlenecks.
They suggest being long enablers of mobile inference on-device - MediaTek (TW:2454), Qualcomm (QCOM), Analog Devices (ADI), Apple (AAPL) - and short laptops, PCs, motherboards and consoles - Lenovo (HK:992), Nintendo (JP:7974), HP (HPQ), Dell (DELL), Corsair Gaming (CRSR). The latter will be hit by prices and have less potential for a demand resurge and refresh cycles, say the researchers.
Citrini also looks at potential stock beneficiaries should the GOP lose the House in Midterm elections next year. Republican efforts to repeal or hollow out the ACA could be thwarted and progressive Democrats potentially unable to pass Medicare for all. They see health insurers Molina (MOH), Centene (CNC) and Oscar (OSCR) winning, in that order.
Also on midterms, Citrini expects big spendingby incumbents trying to hold onto majorities. Ad companies Omnicom (OMC) and WPP (WPP), broadcasters Nexstar (NXST), Tegna (TGNA) and Sinclair (SBGI) and French polling group Ipsos (FR:IPS) could all benefit.
Over to biotech and their &#34;fat redistribution play,&#34; which focuses on a new technology aimed a replicating a gene in the liver of some people who have healthier fat redistribution, better glycemic and lipid control and lower odds of metabolic disease. &#34;Wave Life Sciences (WVE) and Arrowhead Pharmaceuticals (ARWR) are pursuing exactly this using GalNAc-siRNA technology, which is specialized for liver targeting,&#34; says Citrini.
The idea would be a twice-yearly dose to help preserve and build lean mass and deliver sustained metabolic benefit even amid active weight loss. Eli Lilly (LLY)-backed SanegeneBio and Alnylam (ALNY) are also in that basket.
Finally, Citrini's &#34;Girlfriend Index,&#34; eyes investment opportunities in female consumer behavior, gauging TikTok, Reddit, Instagram, resale market and influencers. They conclude after years of &#34;quiet luxury,&#34; the consumer is ready to be &#34;seen again.&#34;
&#34;Wealth effects from the technological and financial markets on the highs plus tailwinds from the Big Beautiful Bill in the first half of 2026 will drive an acceleration in consumer discretionary spending,&#34; already showing up for this holiday season, they say. LVMH (FR:MC), Kering (FR:KER), Ralph Lauren (RL), Richemont (CH:CFR), Amer Sports (AS) and Prada (HK:1913) are stocks to benefit.
The markets
U.S. stock futures (ES00) (YM00) (NQ00) are rising, led by tech, with Treasury yields BX:TMUBMUSD10Y BX:TMUBMUSD02Y lower.
The buzz
The November consumer-price index will be released, alongside weekly jobless claims and the latest Philadelphia Fed manufacturing index at 8:30 a.m.
Micron Technology (MU), the memory-chip maker that's nearly tripled in value this year, delivered revenue guidance well above forecasts and shares are up 8%.
Lululemon shares (LULU) are climbing on a report activist investor Elliott Management has taken a big stake in the athleisure-wear maker and eyeing a new CEO.
Elliott has also been critical of BP (BP)'s strategy reset in the last two years. The company just named a new CEO, Meg O'Neill.
President Donald Trump attempted to reassure Americans worried about the economy with a $1,776 'warrior dividend' for U.S. military members and plans for an &#34;aggressive reform&#34; of housing.
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The chart
@nosunkcosts.bsky.social
This chart, from the Blue Sky account No Sunk Costs, shows that Tesla (TSLA) stock has rallied in value even as earnings projections not just for this year, but 2026, 2027 and 2028 languish. &#34;One has to admit that whatever is going on here, there is something truly astonishing about it,&#34; said the social-media user. Shares of Tesla are up just over 15% this year.
Top tickers
These were the top-searched tickers on MarketWatch as of 6 a.m.
Random reads
The Fresh Prince of cold air.
Man sneaks onto flight without boarding pass or passport.
The fight to save a 28-foot Santa.
-Barbara Kollmeyer
This content was created by MarketWatch, which is operated by Dow Jones &amp; Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
12-18-25 0652ET

<p>Citrini Research, known for accurately predicting 2025 investment themes, advises investors to remain open-minded for 2026. They highlight overlooked companies in AI, on-device AI trends, and potential stock beneficiaries from political shifts. Key investment ideas include companies like CGI, IBM, Qualcomm, and health insurers like Molina. They also explore biotech innovations and consumer behavior trends, suggesting stocks like LVMH and Ralph Lauren could benefit. The research emphasizes adaptability in investment strategies for the coming year.</p>

From on-device AI to the 'girlfriend index,' trading ideas from the research firm that nailed 2025's investment themes