For 2026, four stocks

Investment experts recommend four stocks that investors should watch for 2026 as the year comes to an end

A new year is coming up, and if it's anything like 2025, the stock market is going to have a busy year.

The stocks that will perform best in 2026 are hard to predict. We recently reviewed the most well-liked stocks from 2025 (as well as the best funds of the year), and we've heard from a number of experts about where to invest in 2026.

Emerging markets (EMs) and UK stocks are generally expected to perform better.

According to Russ Mould, investment director at AJ Bell, "the FTSE 100 is finishing 2025 near record highs and dividends and share buybacks are neatly supplementing the capital gains." "As 2026 approaches, the UK market might still have stocks that appeal to a variety of risk tolerances and investment strategies. A "

In the meantime, Fidelity Emerging Markets Limited (LON:FEML) co-portfolio manager Chris Tennant states: "The outlook for EM today appears positive. Despite the recent rally, the valuation backdrop is favorable, with EM trading at a multi-decade discount to the US. A "

However, even as worries about an AI bubble grow, it would be a bold investor to discount the potential of AI stocks to continue leading gains.

Here are the top stock recommendations made by investing experts for the upcoming year.

A 2026 small cap stock.

Oddity Tech (NASDAQ:ODD) is the small cap investment that Simon Barnard, portfolio manager of the small cap-focused Smithson Investment Trust (LON:SSON), believes investors should keep an eye on in 2026.

Oddity is a US-listed company that designs and sells skincare and cosmetics directly to customers online. What sets it apart is how it uses machine learning in conjunction with its database of 2 billion consumer data points to successfully match customers with the products that best suit their needs.

"Profit growth will be less spectacular in 2025 owing to product and marketing investments for the recent launch of its new prescription skincare brand, Methodiq," says Barnard, despite revenues growing by 155% and profits by 320% over the last three years.

Oddity's stock has plummeted as a result of this decline (shares dropped sharply in August and are essentially flat for the year as of December 16). However, Barnard anticipates that once the recent investments fade, earnings growth will improve to about 20 percent annually.

A 2026 UK stock.

As a balanced UK stock for 2026, Mould at AJ Bell chooses Telecom Plus (LON:TEP), which serves over 1.4 million customers with energy, mobile, insurance, and broadband services.

"Shares in Telecom Plus are no higher now than seven years ago, after a fall of more than 30 percent in the past six months," Mould says. "A share price chart that goes from the top left-hand corner of the screen straight down to the bottom right is not a pretty sight."

However, this autumn might offer a chance to invest in a stock that has a solid track record of increasing its clientele, earnings, and dividends over the long run. A "

Despite a decline in first-half profits, Mould emphasizes that management adhered to its full-year guidance, with CEO Stuart Burnett blaming the declines on timing problems.

"Telecom Plus can point to dividend payments worth 922p per share over the past ten years, and an increase in the interim dividend spoke of management's faith in the outlook," Mould stated. "The long-term outlook is supported by the potential for additional customer growth as they shop around for better deals and cross-selling, which could benefit the shares if Telecom Plus persuades the skeptics and meets its full-year profit outlook next spring. A "

According to Mould, Telecom Plus offers "the right mix of upside potential and downside protection" with forward P/E multiples of approximately 12 and 11 for the upcoming fiscal years, respectively, and a forward dividend yield of 7%.

Additionally, Mould identified the FTSE 100 pharmaceutical behemoth GSK (LON:GSK) as a cautious UK stock and the housebuilder Bellway (LON:BWY) as a daring choice for risk-takers.

An EM stock in 2026.

Aura Minerals (NASDAQ:AUGO), a Brazilian gold miner, was chosen by Tennant at Fidelity Emerging Markets Limited as his preferred EM stock for 2026.

Although the price of Auras stock has doubled this year due to the spike in gold prices, it is still only trading at nine times the projected earnings.

"At current production levels, the company can generate a free cash flow yield of over 20 percent at gold prices as low as £3k/oz, well below today's spot levels," says Tennant. "Production is expected to double once the current project pipeline is finished, and capital expenditure levels are also high, even though this can be funded out of cash while still maintaining a generous dividend. The "

A 2026 income stream.

Lancashire Holdings (LON:LRE) is Moulds' choice for income-focused investors. Lancashire is well-known for underwriting in its specialized fields of energy, property, aviation, and marine insurance (and reinsurance).

"It has paid out more than 900p per share in ordinary and special dividends between 2008 and the first half of 2025, a figure which catches the eye in relation to the current share price of 614p as of December 16," Mould says.

"Some investors will shy away from catastrophe insurance and reinsurance, as they look at climate change and fear the worst," Mould added. However, Lancashires' exposure to this year's California wildfires proved to be more than manageable, falling within the parameters set by its underwriters for such horrible occurrences. The 2025 storm season has been comparatively calm, even allowing for Hurricane Melissa's terrible treatment of Jamaica. A "

According to Mould, the current price of shares is about 1.3 times book value, which "does not look like a lofty multiplier for a business with Lancashires long-term returns profile."

Study Up on the London Stock Exchange.