Hey Folks, The market is at an inflection point. After a turbulent stretch of rate hikes, geopolitical uncertainty, and an AI boom that separated winners from pretenders, 2026 is shaping up to be a year where specific themes could generate big opportunities!
Three dominant forces are converging right now: the insatiable demand for AI infrastructure, a defense sector flush with unprecedented budget tailwinds, and a scramble to secure critical materials that underpin everything from smartphones to fighter jets.
The stocks benefiting from these trends aren't speculative moonshots. They're companies with real contracts, real catalysts, and real momentum building behind them.
Here are five names positioned to capitalize on these megatrends... | | | 1. SLV – iShares Silver Trust
Silver's rally has been impressive, but the thesis suggests this is just the beginning. As the best electrical conductor on Earth, silver is becoming increasingly vital to the AI buildout. Every data center, GPU, and server rack requires it.
Why silver matters now:
- AI infrastructure demand – The explosion of data centers is creating unprecedented industrial demand for silver's conductive properties
- Structural supply deficit – Roughly 70% of silver production comes as a byproduct of other mining operations, meaning supply can't simply be "turned on"
- Dollar debasement hedge – With government spending elevated and de-dollarization trends accelerating globally, hard assets offer compelling inflation protection
The supply-demand imbalance here is structural, not cyclical.
2. KTOS – Kratos Defense & Security Solutions
Kratos is building the future of warfare. The company specializes in unmanned drones designed to fly alongside fighter jets like the F-35, hypersonic missile systems, and satellite communication technology.
The bull case:
- Valkyrie program momentum – Kratos recently won a Marine Corps contract alongside Northrop Grumman to deploy their Valkyrie drones in collaborative combat aircraft operations
- Hypersonic expansion – A new 55,000 sq. ft. facility in Maryland is being constructed specifically for hypersonic testing, tied to a $1.4 billion contract
- Defense budget tailwinds – The proposed expansion of the defense budget to $1.5 trillion by 2027 positions Kratos directly in the spending sweet spot: drones, hypersonics, and advanced communications
This is a company riding multiple defense priorities simultaneously.
3. SMCI – Super Micro Computer
SMCI was one of the most hated stocks of 2024 following accounting concerns and margin compression fears. But the narrative is shifting. The stock recently ripped 11% in a single session on renewed AI demand optimism, and the fundamental setup looks increasingly attractive.
Taiwan Semiconductor's announcement of a $56 billion capex hike sent a clear message: AI demand isn't slowing down. SMCI remains the pure-play on AI server infrastructure.
What's changed:
- Liquid cooling dominance – As AI chips grow more powerful, cooling becomes critical. SMCI's liquid-cooled rack solutions are emerging as the industry gold standard
- Valuation reset – The stock got cut in half from its highs and now trades at less than 1x sales with a $13 billion backlog
- Balance sheet improvement – A new $2 billion credit facility is in place, and the accounting drama has been resolved
Analysts who remain cautious on the name still see approximately 50% upside from current levels. | | | 4. MP – MP Materials
MP Materials operates the only scaled rare earth mining and processing site in North America. The investment case has strengthened considerably as geopolitical tensions around critical materials have intensified.
Key developments:
- Government becomes largest shareholder – The Pentagon invested $400 million directly into MP Materials, signaling just how critical rare earths are to national security
- Guaranteed revenue floor – The military agreed to purchase MP's rare earth products at $110 per kilogram for the next 10 years—locked-in revenue backed by the U.S. government
- Apple partnership – A $500 million deal to supply American-made rare earth magnets for iPhones, AirPods, and other devices
- Geopolitical catalyst – With China controlling 90% of rare earth processing, the push to build domestic supply chains is only accelerating
MP went from competing against cheap Chinese imports to having the U.S. government literally guaranteeing their business.
5. USAR – USA Rare Earth
USAR has been on fire to start the year, climbing around 50% in just the first few weeks of 2026. The rare earth theme is playing out, and USAR is positioned as a domestic beneficiary.
Catalysts ahead:
- Stillwater plant coming online – The Oklahoma facility for processing rare earths and manufacturing magnets is scheduled for commercial production in Q1 2026, meaning revenue should begin flowing soon
- European expansion – The French government is providing massive subsidies: 45% of equipment costs covered plus €130 million for real estate as Europe seeks to de-risk from China
- Venezuela speculation – Regime change has sparked speculation about potential access to the Orinoco mining arc, which contains 300,000 metric tons of rare earth deposits including neodymium
- Potential government investment – If MP Materials received $400 million from the Pentagon, USAR could be next in line for similar backing
These five names share a common thread: they're positioned at the intersection of AI infrastructure buildout, defense modernization, and the critical materials race.
The themes are clear. The catalysts are identifiable. These are the setups worth monitoring closely.
Anyways...
That's all for now!
Until Next Time, -ZT Team | P.S. Want our text alerts? Text "ZIPTRADER" to 1-(855)-228-1598 to sign up!
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