My outlook for 2026 is largely bullish – particularly for the first half of the year.
I anticipate that Trump’s Federal Reserve pick will help spur somewhat cautious optimism for the top end of the US market.
With that said, whoever Trump picks will have to walk a bit of a tightrope with bond markets as any revolt there could undermine their ability to get the market moving strongly upward again.
As for the ASX and the small caps and micro caps that I focus on, I expect them to once again outperform the large caps found in the ASX 200.
I’ve positioned members of my exclusive micro-cap service for all of the themes I am about to discuss today.
A small gold-gallium play in the same state where US chip-maker Intel has built one of its newest chip factories (gallium is crucial for next-gen AI chips).
An ultra high-grade copper developer following the same playbook as New World Resources which got taken out at a massive premium in the current copper M&A frenzy.
A South Dakota lithium company with ground once owned by Thomas Edison, mining permits and a resource that could grow by 8x in my base case scenario after recent drilling.
A biotech company going after the massive osteoarthritis market, with crucial phase three results that could unlock a big licensing deal.
These are the companies we take positions in, to benefit from the themes I am about to discuss.
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Now, back to my views for 2026…
I’ve got my eye on a quite novel scenario that could play out where there are US Fed rate cuts in an inflationary environment.
Rate cuts favour companies with growth and cashflows that are further away than the here and now.
Meanwhile, commodities are hard assets and have long been used as an inflation hedge.
With speculative, yet well vetted commodity stocks you get a chance to tick both of these boxes at once.
As a result I am looking at three commodities in particular right now – lithium, uranium and copper.
Here’s why…
Commodities: a second order
effect of an AI boom
While everyone’s been obsessing over Nvidia and OpenAI, I’ve been looking elsewhere. At the rocks that AI data centres rely on. The metals that power the electrification of everything.
Commodity markets are wild beasts. But the structural demand story remains really strong in three areas.
Lithium: the third and final run
I’m convinced we’re on the cusp of lithium’s final speculative run before it transforms into a “boring” industrial metal like iron ore.
Many punters are twice bitten by the battery metal, and thus very reluctant to get back in.
The narrative is shifting in a profound way and the new demand driver, the real dark horse, is Battery Energy Storage Systems (BESS).
These systems are great for renewable energy grid firming AND AI data centre backup.
So while demand for EV batteries is expected to grow in the mid-20% range, demand for BESS is projected to grow in the mid-50% range.
Every year.
This is a global story. In China, supportive government policies are creating massive tailwinds, with a plan to more than double BESS capacity by 2027 to stabilize the grid and support the massive buildout of wind and solar. It’s a key part of their industrial growth strategy.
But it’s not just China. In the US, South Korea’s Samsung SDI is already converting EV battery production lines to increase BESS output. Australian miner Pilbara Minerals said recently that the sector is growing in ‘leaps and bounds’. Analysts at JP Morgan have taken notice, upgrading their medium and long-term price forecasts for lithium specifically on the back of this sharply rising BESS demand.
Then imagine if a place like India, which has big AI data centre ambitions, decides it needs BESS.
There’s also the UAE to consider, and other Gulf countries that are going hard at tech.
There is very little lithium offtake available in the market to satisfy these so far unaccounted for sources of potential demand.
Lithium forecasts are getting revised up, but so far quite cautiously.
Underneath the surface, I’m convinced a big 2026 lies ahead for lithium.
Speaking of AI data centres…
Uranium: More to come
Spot uranium prices are consolidating just below US$80 per pound after hitting US$100 early in 2024.
Any move back to US$100/lb would be explosive for junior uranium stocks.
China, India, and several European nations are actively expanding their nuclear reactor fleets. Countries in the Middle East and Southeast Asia are investing in nuclear as part of long-term energy strategies.
Meanwhile, AI data centres are driving massive baseload power demand that wind and solar simply can’t meet reliably.
The US Department of War is pushing for more nuclear power to support strategic operations. Supply constraints remain. Kazakhstan’s Kazatomprom lowered 2026 production guidance. Canadian giant Cameco cut McArthur River guidance.
The developers with quality assets, strong balance sheets, and government backing are positioned to benefit as prices push higher in 2026.
Copper: “The Only Critical Mineral”
At a mining conference in Toronto, I heard Canadian mining legend Pierre Lassonde say something that stuck with me.
“Copper is the only critical mineral.”
He meant that all our electrification and decarbonization goals rely on copper to work.
Global copper demand is projected to rise from 23.5 million tonnes in 2019 to 31.1 million tonnes by 2030. That’s driven by renewable energy infrastructure, data centres, and electricity grid upgrades that have been deferred for decades.
Meanwhile, global copper grades have declined 40% since 1991, while development timelines now average 17 years.
The major miners understand this, and recent deals prove the appetite. BHP paid billions for Filo Corp. Harmony Gold bought MAC Copper for US$1BN. Gina Rinehart could shell out US$120M for a copper project in Ecuador.
High-grade brownfields projects with existing permits are becoming increasingly valuable. The majors need them to replace declining production and meet surging demand.
I expect to see more M&A activity in the copper space as 2026 unfolds. The companies with quality assets in safe jurisdictions should continue to attract bidding wars like we saw with New World Resources [ASX:NWC] earlier in 2025.
Shifting to something nobody wants to touch right now though…
Cryptocurrency: Was that all? Doesn’t look like a brutal winter to me.
Bitcoin has plunged from October’s peak above US$120k to around the US$90K range.
But I don’t think this shakeout is the start of a long crypto winter. It’s a disguise.
All we see are headlines about falling prices.
But this is about what I call techno-monetary competition between superpowers. The US and China are racing to dominate digital currency infrastructure.
Meanwhile US regulatory support under a more crypto-friendly administration will help. We’ve seen the GENIUS Act, and the CLARITY Act should only amplify the US’s gambit to use cryptocurrency dominance as a way to compete with China.
I don’t think the crypto resurgence will look like 2021. It will be more measured, more institutional, more foundational. But the upside remains enormous for those positioned correctly.
The Great Money Flood of 2026
Let me tie this all together.
AI spending by companies now accounts for ~40% of US GDP growth this year. That’s nuts. The market decided at the end of 2025 that it is unsustainable in the short term.
But the Federal Reserve still has significant firepower. Rates at 3.5-3.75% give them plenty of room. If bond markets don’t have a major freakout then that should lead to a strong first half of 2026. Beyond that, I expect the gold debasement trade to really hit its straps again.
Until then, certain critical minerals companies should perform well if the US-China trade war re-accelerates.
At the start of the new year – I think its time to be aggressive and take positions that others are too scared to take right now.
All of the themes above present great opportunities to get in early before the market reaches the historically most dangerous point – consensus.
If I’m right on all of the above, 2026 could present some standout growth opportunities, especially in the microcap space that has, until now, had a tough few years.
Here’s the deal, a Christmas gift from me to you:
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Have a great holiday break period, and I look forward to sharing new ideas with you in 2026.
Regards,
Lachlann Tierney,
Australian Small-Cap Investigator and Fat Tail Micro-Caps
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