The Motley Fool 2026 Stock Market Outlook: 58% of Individual Investors Plan to Buy More Stocks as AI Drives Optimism

2026-03-10 06:06:58

Individual investors are heading into 2026 with strong conviction in the stock market, driven largely by AI stocks, according to a Motley Fool survey of 2,000 investors.

The Motley Fool’s 2026 Investor Outlook and Predictions Report shows that the majority of individual investors plan to either hold (34%) or buy (58%) more stocks in 2026, with Gen Z and millennials leading the charge. That optimism comes as AI-related capital expenditure (capex) spending helped propel the stock market to all-time highs in 2025.

Survey respondents overwhelmingly expect AI and technology to be the primary drivers of market growth in 2026. At the same time, investors remain clear-eyed about risks: Recession concerns, stubborn inflation, and a weakening labor market were among the biggest threats to a sustained bull market cited by respondents. Gen Z and millennials plan to drive 2026 investment.

Gen Z and millennials are more likely than older generations to invest additional money in the stock market in 2026: 68% of Gen Z and 64% of millennials plan to increase their stock positions in 2026 compared to just 46% of Gen X and 39% of baby boomers.

Ownership of AI stocks sharpens that divide: 70% of AI investors plan to buy more stocks in 2026 compared with 46% of non-AI investors. That gap suggests optimism is being reinforced not just by headlines but by firsthand exposure to the performance and earnings power of companies like Nvidia (NVDA +2.71%), Alphabet (GOOG +2.66%), and Microsoft (MSFT +0.17%).

Overall, 58% of survey respondents intend to increase their investments outside their retirement accounts, while only 4% plan to pull back.

Gen Z and millennials plan to drive 2026 investment

Overall, 58% of survey respondents intend to increase their investments outside their retirement accounts, while only 4% plan to pull back.

Nearly 70% of individual investors predict market gains of 4% or more in 2026

Most individual investors predict modest returns for the stock market in 2026, with 57% expecting returns of 4% to 9%. Another 11% expect the market to return 10% or more. Only 3% anticipate a large decline of 10% or more. To put those expectations into perspective, the S&P 500 returned an average of 13.5% annually over the last decade, and most individual investors are expecting a muted year for the market.

AI investors are slightly more bullish: 64% of AI investors expect modest gains (4% to 9%) in the stock market and 11% forecast strong gains (10%+) compared with 50% and 10%, respectively, for non-AI investors. That’s yet another sign that AI stock owners believe the technology will be so transformative as to drive higher returns across the market.

Tech and consumer discretionary are predicted to be the hottest market sectors

Information technology tops the list of market sectors expected to deliver the strongest returns in 2026, with 44% of individual investors selecting it among their top three market sector picks. Consumer discretionary (32%) and communication services (31%) follow closely, reflecting a belief that consumer spending will remain strong despite persistent affordability concerns.

“Survey respondents’ overall appetite for these sectors aligns with their optimism on AI-based investment opportunities, especially in tech and communication services," said Motley Fool Senior Investment Analyst Asit Sharma. “And the persistence of the ‘K-shaped’ recovery lends credibility to respondents’ enthusiasm for consumer discretionary stocks – and not consumer staples,” he added, referring to a recovery in which some sectors see accelerated growth while others stagnate or decline.

AI stock ownership doesn’t materially change enthusiasm for tech overall, but it does influence where investors see spillover effects.

AI investors are more likely to favor communication services, consumer discretionary, and consumer staples, market sectors they see benefiting from AI-driven efficiency, personalization, and automation.
Non-AI investors are more inclined to expect utility stocks to outperform, pointing to a more defensive or income-oriented tilt.

While enthusiasm for AI and technology stocks remains strong, diversification remains important, especially as the market rapidly evolves. Rather than concentrating portfolios in a single sector or a handful of high-flying stocks, spreading investments across multiple market sectors and types of stocks, including value stocks, small- and mid-cap companies, and international markets, can help manage risk and capture a broader range of opportunities. This approach is especially relevant because market leadership – currently somewhat concentrated – might shift and as valuations in certain sectors become stretched.

The sectors that individual investors predict to have the lowest returns are:

Real estate (30%), as the office market continues to recalibrate post-COVID and housing demand slows.
Healthcare (26%), which faces pricing and regulatory pressures.
Materials (24%), which underperformed the S&P 500 in 2025.
Consumer staples (24%), which also lagged behind the S&P 500 and are composed of relatively defensive stocks.

Sharma, however, sees the real estate and healthcare sectors as potentially in line for a better-than-expected year. “Real estate and healthcare are both due for a boost from capital rotation after many years in the wilderness,” he said. “Valuations look appealing in both sectors, and, especially in healthcare, M&A activity is poised to accelerate while earnings improve in 2026 despite regulatory risks.”

Individual investors are overwhelmingly bullish on AI in 2026

Optimism around artificial intelligence is one of the strongest signals from The Motley Fool’s 2026 Investor Outlook and Predictions Report.

Nearly two-thirds of individual investors (65%) say they have a positive outlook on AI and AI-related stocks in 2026, while just 10% have a negative outlook.
Optimism is even stronger among younger investors: 71% of Gen Z and 69% of millennials are bullish on AI compared with 58% of Gen X and 52% of baby boomers.

Among investors who already own AI stocks, 81% have a positive outlook for AI stocks in 2026 and beyond, and only 4% are pessimistic. By contrast, investor sentiment is far more mixed among those who don’t own AI stocks, with 34% expressing only neutral sentiment about AI stock performance and 16% expecting AI investments to disappoint.

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About the Author

Jack Caporal is the Research Director for The Motley Fool and Motley Fool Money. Jack leads efforts to identify and analyze trends shaping investing and personal financial decisions across the United States. His research has appeared in thousands of media outlets including Harvard Business Review, The New York Times, Bloomberg, and CNBC, and has been cited in congressional testimony. He previously covered business and economic trends as a reporter and policy analyst in Washington, D.C. He serves as Chair of the Trade Policy Committee at the World Trade Center in Denver, Colorado. He holds a B.A. degree in International Relations with a concentration in International Economics from Michigan State University.

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JPMorgan Chase is an advertising partner of Motley Fool Money. Jack Caporal has positions in Microsoft. The Motley Fool has positions in and recommends Alphabet, GE Vernova, JPMorgan Chase, Microsoft, and Nvidia. The Motley Fool recommends BlackRock. The Motley Fool has a disclosure policy.

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