The first half of 2026 brought plenty of volatility, particularly in memory stocks, while Wall Street remained distracted by short sellers and geopolitical tensions.
As investors look ahead to the second half of the year, here are five predictions to watch.
Earnings growth will accelerate
My highest-confidence prediction for the second half of 2026 is that earnings will continue to accelerate. A lot of that has to do with year-over-year comparisons, strong order backlogs, and rising investor confidence.
Earnings season is judgment day, and I go into every earnings season locked and loaded because Wall Street does not pay attention to earnings the way I do. When earnings come out, investors assess them, but they are often distracted by other things, focusing only on qualitative analysis rather than combining it with a quantitative analysis of trading activity.
Earnings strength is expected to be concentrated in three sectors. Energy-related stocks are forecasted to post the strongest earnings, followed by information technology and semiconductors, then material stocks.
Earnings growth will be narrow
Only three of the 11 S&P 500 sectors are forecast to post stronger second-quarter earnings than the overall S&P 500, so we remain in a relatively narrow stock market environment.
In energy, recommended names include Okeanis Eco Tankers (ECO), International Seaways (INSW), Teekay Tankers (TNK), HF Sinclair (DINO), Phillips 66 (PSX), Cenovus Energy (CVE), and Suncor Energy (SU).
Next up, information technology, including all the data center-related and semiconductor stocks such as Nvidia (NVDA), Advanced Micro Devices (AMD), Micron Technology (MU), Seagate Technology (STX), Palantir Technologies (PLTR), AppLovin (APP), Bloom Energy (BE), GE Vernova (GEV), Comfort Systems USA (FIX), Quanta Services (PWR), and Ciena (CIEN).
Lastly is materials, with recommended names including Carpenter Technology (CRS) and Howmet Aerospace (HWM).
I suspect we will see the biggest gains in energy.
Related: Citi strategist flags rare setup for earnings season
The best buys will be in memory stocks
Memory stocks have been a rollercoaster, but in my opinion, all the memory stocks, led by Micron Technology (MU), SanDisk (SNDK) and Seagate Technology (STX), are great near-term buys.
There is a lot to be excited about. South Korean memory company SK Hynix (SKHY) had the second-largest IPO ever (after SpaceX), raising $28 billion.
Meanwhile, Micron Technology announced it is accelerating its planned U.S. fab and technology investments and is increasing its expected spending forecast to more than $250 billion through 2035, driven by surging AI-related demand for memory. The company anticipates its increase in U.S. investments will support its long-term goal of producing 40% of its DRAM (dynamic random-access memory) in the U.S.
There is a narrative that the expansion of production in Korea and the United States will eventually create a memory glut. Memory prices have traditionally declined when supply increases. For now, however, the industry appears to have at least a 15-month order backlog, and I expect prices to remain high until that backlog is depleted.
August will bring seasonal risk
The biggest immediate risk to the market is seasonality. I have never liked August because so many market participants are away on vacation, which can create sudden air pockets in the market.
The August selloff in 2015 illustrates this risk. Some individual stocks temporarily stopped trading, while the exchange-traded funds that held those stocks remained open. Because the underlying shares could not be priced properly, many ETFs opened sharply lower. As an example, iShares Select Dividend ETF (DVY) fell nearly 35% at the open before recovering much of the decline by the end of the day. Investors with stop orders, however, could have been forced to sell near the opening and lock in substantial losses.
Another risk is a Black Swan event in the credit markets, although I do not see a Black Swan credit event developing because institutional investors have replaced retail investors in many private-credit deals, and market rates are coming down slowly but steadily.
Seasonal volatility, however, remains a concern. So, I encourage investors to stay alert and nimble in August.
Apple’s scarcity play will be a major hit
Apple may announce a folding iPhone in September 2026, reportedly called the iPhone Ultra.
Although an ex-Apple employee told me that the folding phone won’t happen, multiple leaks and pictures suggest that the folding phone is coming. Apple also previously signed a deal with Samsung Display to develop the product.
The phone will likely be in short supply, andI think it could cost approximately $3,000. I expect everybody is going to want this folding phone, so anyone who wants one immediately following the announcement should be prepared to order it from Apple’s website as soon as it becomes available. Even then, buyers may have to wait.
I think it will be a major hit and one of the most exciting technology products announced in 2026.
In short, this will be one of the best earnings seasons in recent memory. It’s a stock picker’s market, however, since this rising tide will not lift all boats. Further, stock prices are not growing as fast as earnings. Part of this, I think, is disbelief.
For instance, when Bloom Energy (BE) and GE Vernova’s (GEV) order backlogs are 10x 2025 sales, and GE Vernova’s backlog is about 4x 2025, respectively, it challenges the imagination on what the impact could be on stock prices. Quantitatively, this has the effect of compressing P/E ratios, which can be a buying signal for the faithful, and I am an ardent believer.
Related: Louis Navellier flags three top tech stocks for market growth
