Little, little miss little.

Here’s the guidance an asset manager offers advisors closer to 2026 Looms. The S&P Smallcap 600 and Midcap 400 have outperformed their larger-cap brethren, the S&P 500, for the past five years, but big opportunities may lie ahead for the little guys, according to Ellspring’s 2026 outlook. For years, the market and the wider economy have been driven by a handful of big tech giants riding the AI ​​wave. Allspring now expects a balance, with smaller companies and sector-specific players using technology to gain more investor attention. Advisors who are overweight in large caps may need to reconsider their allocations.

“There’s a lot of money in large caps right now, and the S&P 500 is doing very well, so there’s no need to get away from it,” said Bryant VanCronkhite, senior portfolio manager at Allspring. “But as we move into the next phase of AI, I think we’ll start to see the S&P easily beat by the small- and mid-caps.”

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AI and tech will still be the name of the game in 2026. “Any manager in tech can join the world of lightweight challenges,” Von Cronkite told Advisor Ulta.

• Allspring highlighted industrials and materials as two top sectors to watch next year for their role in building data centers. In particular, Allspring pointed to companies such as cement maker Amrise and Gates Corp., which makes belts and related components for heavy machinery.

• Meanwhile, healthcare has faced quite a few headwinds: rising costs, policy uncertainty, and a post-pandemic environment with low demand for disease vaccines. But those pressures have also driven down prices, and AI is pushing the drug at a faster pace.

“It’s a dark horse,” VanCronkhite said. “Now we can use AI to get screenings that are more accurate at diagnosing problems and figuring out what drug is working better on your body than what it is. Ultimately, you want to be exposed to companies that will participate in this type of personalized medicine.”

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