Opportunities for Investors in Emerging Markets for 2026
On February 19, 2026, a report from Goldman Sachs highlighted promising investment areas in today’s emerging markets, focusing on sectors like artificial intelligence, and countries such as China and India.
Last year, emerging market stocks had their best performance in eight years, with the MSCI Emerging Markets Index rising 34.4%. This surge outperformed many developed markets. Analysts believe this positive trend is set to continue into 2026, fueled by steady economic growth, potential interest rate cuts, a weaker US dollar, and strong corporate health. Lower oil prices are also expected to ease inflation, giving additional support to these economies.
In the realm of technology, the artificial intelligence sector is growing rapidly in emerging markets. Asian companies are becoming crucial to the global AI supply chain, with countries like Korea and Taiwan experiencing gains from strong semiconductor performances. The report mentions promising opportunities for businesses involved in AI development, with visibility for future earnings expected through 2026. The boost from the AI memory market is predicted to positively impact earnings across the semiconductor industry.
China’s economy, despite facing trade tensions, is considered resilient due to its shifting export strategies and emphasis on self-reliance in technology. Key growth sectors include AI infrastructure, lithium-ion battery production for electric vehicles, innovative pharmaceuticals, and robotics. Importantly, China accounts for about 30% of global manufacturing capacity. While challenges remain in real estate and consumer confidence, their effects on overall growth are fading.
India, which saw a slower 2025 due to high initial valuations, is set for an earnings recovery. Favorable government policies, a rise in domestic consumption, and reduced valuation premiums are all supporting factors. Goldman Sachs forecasts that profits in India will grow by 10% in 2025, with an acceleration to robust growth rates of 14% in 2026 and 2027, which is above the average for emerging markets, excluding Korea and Taiwan.
The report points out that emerging markets are often overlooked and can offer significant profit opportunities. Active managers in India have been able to outperform market benchmarks by using flexible strategies that cover a wide range of stocks. Goldman Sachs encourages a proactive and cautious investment approach to take advantage of market gaps, as passive methods may overlook important information.
