How You as an Investor Can Get Ahead of the Next AI Investment Wave

Also in Weekend Reads: Eldercare and family relationships, stock-market prospects for the second half of 2026, and how to set your summer streaming budget

Humanoid robotics represent "a multitrillion-dollar economic opportunity," according to Nvidia CEO Jensen Huang.

Wouldn't it have been lovely to get in on Nvidia's stock before it returned a combined 277% for 2024 and 2025? Or what if you had gone heavy into Sandisk on Dec. 31, before that stock popped 858% during the first half of this year?

The shift from software stocks to Nvidia's (NVDA) dominance of the market for graphics processing units deployed by data centers to support generative artificial intelligence, and then to makers of memory chips and related equipment, might seem to have been inevitable. Following the money spent by hyperscalers on AI hardware has been a winning strategy.

So what's next? Nvidia CEO Jensen Huang considers humanoid robots to be "a multitrillion-dollar economic opportunity." This area provides a small amount of Nvidia's total revenue - it is a very long-term play.

So where can one start? MarketWatch columnist Jurica Dujmovic pointed to early investment plays for another wave of tremendous AI-related spending.

A (selective) tech-led first half ...

The Invesco QQQ Trust nearly doubled the return of the State Street SPDR S&P 500 ETF Trust during the first half of 2026.

The first half of 2026 was another roller coaster for investors, with the Iran conflict, the accelerating movement of money into stocks of memory-chip and component makers, and the plunge in software stocks all contributing to a high level of volatility. But as you can see in the chart above, index-fund investors made out well.

The Invesco QQQ Trust QQQ tracks the Nasdaq-100 Index NDX, which is made up of the largest 100 nonfinancial companies by market capitalization in the full Nasdaq Composite Index COMP. Emily Bary broke down how 10 tech hardware stocks contributed nearly all of the Nasdaq-100's gains during the first half of the year.

QQQ nearly doubled the first-half return of the SPDR S&P 500 ETF Trust SPY, which tracks the S&P 500 SPX. Then again, that 10% return for the S&P 500 during the first half measured up well, considering that the large-cap U.S. benchmark index has returned an average of 12.8% over the past 10 full calendar years, according to LSEG.

Here's a list of the top 20 first-half performers among the S&P 500 - all were up by triple digits, with 17 of them in the information technology sector.

And these were the 20 stocks in the S&P 500 showing the largest first-half declines - a list featuring software companies such as Intuit $(INTU)$, Adobe $(ADBE)$ and Salesforce (CRM), along with providers of various IT services.

Bounceback potential: ServiceNow and Salesforce shares now look like buys, as 'Armageddon' fears are too extreme, analyst says

A look into 2026 Monday market rallies: Trump's Iran strikes fit a surprising 2026 pattern: Here's what the stock-market data shows.

... and what may lie ahead for the stock market

Joseph Adinolfi and Frances Yue explained why even some bullish professional investors are worried about a pullback during the second half of 2026.

Tomi Kilgore highlighted a sector of the S&P 500 that has a stellar record for gains during July.

Another fascinating first-half development was a resurgence for small-cap stocks, with the Russell 2000 Index RUT returning nearly 24%, for its strongest outperformance relative to the S&P 500 since 2001, according to Dow Jones Market Data. Here's what may lie ahead for small caps during the second half.

Nora Redmond: The three factors that have finally brought the small-cap trade to life

High inflation and a confident bond market

The bond market has reacted positively to Federal Reserve Chair Kevin Warsh's comments about the central bank's efforts to hold down inflation.

Way back on June 10, the Bureau of Labor Statistics reported that over the preceding 12 months, the consumer-price index had increased 4.1%, excluding seasonal adjustments. That is a high inflation rate. And since then, the yield on 10-year U.S. Treasury notes BX:TMUBMUSD10Y declined to as low as 4.36% on Monday and Tuesday, after peaking this year at 4.69% in May.

Declining bond yields reflect rising demand, because yields and prices have an inverse relationship.

Joy Wiltermuth looked into the bond market's confidence in the face of high inflation, and what may be in store for 2027.

Related coverage of the Federal Reserve:

-- Warsh tells Wall Street to stop looking to the Fed for clues on interest rates - and start watching the economic data

-- Warsh says he's determined to slay inflation. Investors want to know if he really means it.

Another inflation theme: Value stocks beat growth when inflation is high. Here are 13 stocks top newsletters are betting on now.

Retirement timing

This week in the Help Me Retire column, Alessandra Malito answered questions about Social Security timing. You can begin collecting Social Security payments at age 62, but if you wait, your benefits will increase until they maximize at age 70. How can you figure out your best timing for starting to receive Social Security payments?

More on planning for retirement:

-- Want to live longer in retirement? This one money move could add years to your life.

-- I'm 53 and want to retire in 12 years. Is 5% enough to put in my 401(k)?

Eldercare, estrangement and an advance warning that can help you

An early discussion among siblings about the eventual need to care for parents could prevent conflicts.

Beth Pinsker took a long, hard look at how the burden of caring for elderly parents can cause disputes among siblings. There are many reasons that the division of labor among siblings won't be equal. The consequences of disputes can be dire, emotionally and financially. This article can be useful for families who are thinking well ahead in order to plan and prevent conflicts should elderly parents need to be cared for by their children.

Getting out of a credit-card mess

Aditi Shrikant writes the Dollar Signs column, providing advice to MarketWatch readers. This week she answered questions from a reader who wants to pay their total credit-card debt of $20,000 down to zero within a year. Should they try to negotiate with the lenders to walk away after paying off a lower total balance? Here's the advice.

What to stream - or which streamers to pay for - during July

Mike Murphy continues his wonderful series of What's Worth Streaming, reviewing the offerings from eight streaming services and summing up which ones are worth paying for and which ones you should skip for the month.

The Moneyist offers detailed advice

Quentin Fottrell is the Moneyist.

This week, Quentin Fottrell - the Moneyist - helped a homeowner in his 70s decide between a reverse-mortgage loan and a home-equity sharing agreement, or HESA. Here is a breakdown of advantages, risks and fees.

More from the Moneyist:

-- 'She wants him gone': My friend took in a homeless man as a caretaker. After 10 years, how can she evict him?

-- 'She is retired': Do I dip into my 401(k) to pay my mother's $30,000 credit-card debt?

-- 'It feels like a medical miracle': How did a single QR code coupon cut my $618 Walgreens prescription to $15?

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July 02, 2026 10:53 ET (14:53 GMT)

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