As we close the books on 2025 and look ahead to what 2026 might bring, I’ve been thinking a lot about how quickly market narratives can shift. One year you’re chasing the hottest growth names, the next you’re finding value in places others overlooked. That’s why I always pay close attention when seasoned investors like Dan Niles share their convictions for the coming year.
Niles has built a solid track record spotting opportunities others miss, and his latest list feels particularly timely. With AI still transforming industries, defense spending on the rise, and some iconic brands working through turnarounds, his picks paint a picture of where he sees real potential. Honestly, in a market that’s been dominated by a handful of mega-caps, it’s refreshing to hear thoughtful cases for a broader set of winners.
Why Dan Niles’ 2026 Outlook Matters
Let’s be clear—nobody has a crystal ball. Markets can surprise even the sharpest minds. But investors like Niles earn attention because they combine deep research with pragmatic views on growth drivers and valuations. His approach tends to focus on companies with clear catalysts, whether secular trends or operational improvements.
What stands out this time is the mix: established tech leaders still tied to AI, an underrated chip player in a massive new market, an aerospace giant with a huge order book, and a legendary consumer brand attempting a comeback. It’s not all about chasing momentum; some of these ideas lean toward patience paying off.
Cisco Systems: Still Riding the AI Wave
Cisco is the only name carrying over from Niles’ previous favorites, and it’s easy to see why he’s sticking with it. After years of sluggish growth, the networking giant appears to be regaining traction thanks to artificial intelligence infrastructure buildouts.
Think about it: all those massive AI data centers being constructed need robust networking to connect everything. Hyperscalers are spending heavily, and that spending flows downstream to equipment providers. Niles points out that Cisco’s revenue growth has already improved noticeably, and he believes it can accelerate further as new products hit the market.
Perhaps the most interesting aspect is how corporations themselves will eventually need upgraded networks to handle AI-driven data flows. We’ve only scratched the surface there. With shares already posting strong gains in 2025, the question becomes whether the growth story still has legs. Niles clearly thinks so.
“They’ve got these new products with silicon—one coming out—that should help them to participate in this growing AI infrastructure build, because you’re going to have to network these AI data centers together.”
In my view, Cisco represents that sweet spot where defensive qualities meet meaningful growth potential. It’s not the flashiest AI play, but sometimes the picks-and-shovels providers deliver the steadiest returns.
Apple: Late to AI Could Prove Advantageous
Apple’s inclusion raises eyebrows for some, given its relatively modest performance through 2025. While broader indexes powered higher, the iPhone maker lagged noticeably. Yet Niles sees reasons for optimism heading into the new year.
Key drivers include potential hardware innovation—think form factor changes like foldable devices—and a smarter, AI-enhanced Siri. Being late to the generative AI party might actually work in Apple’s favor, allowing partnerships with emerging players who need distribution muscle.
I’ve always believed Apple’s greatest strength is its ecosystem lock-in. Once meaningful AI features arrive that truly improve daily user experience, upgrade cycles could surprise to the upside. The installed base remains enormous, and services revenue keeps growing steadily.
Of course, risks remain—regulatory scrutiny, China exposure, saturation in premium smartphones. But at current valuations relative to history, the risk/reward starts looking more balanced. Niles seems to agree.
Impinj: Tapping a Trillion-Unit Opportunity
Impinj might be the least familiar name on the list, but the story is compelling. The company manufactures radio-frequency identification (RFID) chips, currently used mainly in apparel tagging. Now major retailers are beginning to adopt the technology for food inventory management.
The scale difference is staggering. Apparel represents roughly 80 billion units annually. Food? We’re talking over a trillion potential tags. As grocers like Walmart and Kroger push for better supply chain visibility and reduced shrinkage, Impinj stands directly in the path of that spending.
- Improved inventory accuracy
- Reduced out-of-stocks
- Better expiration tracking
- Automated checkout potential
These aren’t pie-in-the-sky benefits; they’re real operational improvements driving adoption. Early movers gain advantages, but the market feels wide open still. For patient investors comfortable with smaller-cap volatility, this could represent a classic growth-at-a-reasonable-price setup.
Boeing: Backlog Provides Visibility
Boeing has endured a rough stretch—safety concerns, production delays, labor issues. Yet beneath the headlines sits a massive order backlog approaching $600 billion. Airlines need planes, and despite short-term noise, long-term demand trends remain favorable.
Add rising defense budgets globally, including potential new initiatives like missile defense systems, and the setup improves further. Commercial aviation recovery continues, with travel demand holding resilient even through economic uncertainty.
Turnarounds rarely move in straight lines. Execution risks are real, and regulatory oversight will stay intense. But if management delivers incremental progress on production ramp-ups and quality control, the stock could reflect that massive embedded value over time.
In many ways, Boeing illustrates classic value investing principles: buying unpopular assets with strong underlying fundamentals when sentiment is overly negative. Niles appears willing to look past near-term challenges toward longer-term normalization.
Nike: Betting on a Legendary Turnaround
Nike rounds out the list, another name that underperformed significantly in 2025. Inventory overhangs, competitive pressures, and strategic missteps weighed on results. Yet recent insider buying—including from the new CEO and a prominent board member—caught attention.
The new leadership brings deep company history, returning to focus on core strengths: sport authenticity, innovation, and wholesale relationships. Sometimes the best fix for a mature brand is remembering what made it great initially.
“He’s taking it back to its roots, which is focused on sports distribution and innovation.”
Consumer discretionary names can be cyclical, and athletic apparel feels particularly sensitive to sentiment shifts. But Nike’s brand equity remains unmatched in many categories. If product pipelines improve and distribution strategy regains footing, comparisons could become much easier.
I’ve found that successful turnarounds often feature committed insiders putting money to work alongside shareholders. That alignment matters. Patience will be required, but the downside might already reflect much of the bad news.
Putting It All Together
Stepping back, Niles’ selections share common threads. Each company benefits from identifiable catalysts—AI spending, technology adoption, order visibility, operational restructuring. Valuations appear reasonable relative to growth prospects, avoiding the nosebleed levels seen in some popular names.
Diversification across sectors also stands out: technology infrastructure, consumer ecosystem, specialty semiconductors, aerospace/defense, branded apparel. That’s thoughtful portfolio construction, reducing dependence on any single narrative.
Of course, individual investors must do their own homework. Macro risks—interest rates, geopolitics, recession odds—could impact any of these stories. But having conviction around specific company drivers often helps navigate broader uncertainty.
Personally, I appreciate when experienced managers share detailed theses rather than vague optimism. It encourages deeper thinking about where real opportunities might hide. Whether you agree with every pick or not, the framework feels worth considering as we enter 2026.
Markets reward those who look beyond headlines toward fundamental change. Maybe that’s the biggest takeaway here—finding companies positioned for multi-year improvement, even if the path isn’t perfectly smooth.
Here’s to an interesting year ahead. May your research be thorough and your convictions well-timed.
