Nolan begins by reiterating the strength of his updated three-fund portfolio for simple investing. However, he suggests that to achieve greater upside or increased dividend income, investors should consider adding specific, higher-risk sectors. He advocates for a 'core-satellite' investment strategy, where 80-85% of a portfolio is allocated to broad-based, lower-risk ETFs, and approximately 20% is dedicated to more aggressive 'satellite' positions, including sector-specific ETFs and individual stocks.
Nolan outlines several such high-potential sectors for investment in 2026:
**Quantum Computing**: Nolan identifies quantum computing as a nascent, high-risk sector with trillion-dollar technology shift potential, akin to investing in AI before its boom. Major players like IBM, Alphabet, and Microsoft are investing heavily, while pure-play firms such as IonQ are showing rapid revenue growth. This technology could revolutionize drug discovery, cybersecurity, AI optimization, and finance by solving problems classical computers cannot. Its speculative and volatile nature is precisely where Nolan sees the biggest upside before widespread adoption.
**AI Memory**: He points to memory as one of the most leveraged ways to capitalize on the AI boom, noting that every AI server, data center, and high-performance device requires vast amounts of DRAM and high-bandwidth memory. Following a painful downcycle, the memory market has tightened, pricing has improved, and demand is accelerating due to the race to build AI infrastructure. Companies like Micron Technology, Samsung Electronics, and SK Hynix are poised to benefit from stronger margins and rising earnings. While cyclical and volatile, memory stocks offer a timely blend of recovery and secular AI growth in 2026.
**Crypto**: Nolan suggests considering crypto in 2026, as the asset class is gaining mainstream acceptance through institutional adoption, spot ETFs, improving regulation, and growing corporate interest. Bitcoin is increasingly seen as 'digital gold' and a hedge against currency debasement, with blockchain networks expanding into payments, tokenization, and decentralized finance. Despite its volatility and high-risk nature, Nolan believes the market is more mature than in previous boom-bust cycles, yet still early enough for significant long-term upside if adoption continues.
**AI Infrastructure (Picks & Shovels)**: This sector focuses on the foundational elements that enable AI, such as power, data centers, cooling, land, networking, and GPU compute capacity. Nolan argues that while chipmakers like Nvidia get attention, AI models require a physical place to run, and demand for electricity-intensive compute is skyrocketing. Companies like Applied Digital (APLD) and Iris Energy (IREN) represent the 'picks and shovels' of this boom, benefiting from long-term contracts and scarce infrastructure assets. He believes the biggest bottleneck for AI expansion may become power and compute space, making these companies crucial.
**Space Sector**: Nolan recommends investing in the broader space sector to gain indirect exposure to SpaceX and the overall growth of the space economy, especially since SpaceX is currently private. Public companies involved in launches, satellites, defense systems, and communications stand to benefit as SpaceX expands Starlink and reusable rocket technology. Falling launch costs are creating new markets like space internet, earth imaging, and lunar missions. Investing now offers early participation in a long-term megatrend, though he warns about high fees associated with some dedicated space ETFs.