$386 billion fund manager drops bombshell 2026 stock forecast | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

Ken Fisher expects 2026 to be yet another winning year for equities, forecasting that U.S. stocks will outperform while European markets deliver even stronger returns.

As the billionaire founder of Fisher Investments with $386 billion under management, Fisher’s “been-there-done-that” perspective carries weight. Having navigated everything from 1970s runaway inflation to the 2022 bear market, his comments on stocks, including his surprising take on Europe, contrast with much of what we’re seeing so far in 2026.

Euro Stocks 50 (FEZ) vs. S&P 500 (SPY) returns (past five years):

2025: FEZ +37.78% /SPY +17.72
2024: FEZ +3.55 / SPY +24.89
2023: FEZ +27.19 / SPY +26.19
2022: FEZ -14.30/ SPY -18.17
2021: FEZ +14.83 / SPY +28.75 Source: Morningstar

Worries over sky-high AI spending and agentic AI forcing layoffs have dominated so far this year, contributing to a major rotation out of technology into defensive baskets like energy and healthcare.

Moreover, many think Europe’s economy is mired in a slump. From Fisher’s perspective, this backdrop isn’t the signal to run for the exits; instead, he views it as justifying his bullishness.

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Europe could beat the U.S. again in 2026

While most investors are glued to the Nasdaq 100, Fisher pivoted in 2025, calling for a solid year for U.S. stocks but for much higher, better returns overseas.

That call turned out to be pretty prescient. The SPDR Euro Stocks 50 ETF (FEZ) surged 37.8% in 2025, trouncing the S&P 500, which returned a very respectable 17.8%, including dividends.

Europe’s outperformance points to an inverse reality: Markets often perform best when the news is the ugliest.

Ongoing concerns that Europe, particularly Germany, is mired in headwinds likely to derail stocks put them in the perfect position for a repeat performance, argues Fisher.

“Consensus forecasts are typically wrong,” wrote Fisher on X. “Markets pre-price groupthink and usually do something different. My 2026 forecast? Stocks positively surprise with Europe likely outperforming the US for a second consecutive year.”

Ken Fisher at-a-glance:

Founder and executive chairman of Fisher Investments, with $386 billion in assets under management, including affiliates, according to Fisher Investments.
Wall Street career: Launched Fisher Investments in 1979, according to Fisher Investments.
Net worth (2026 est): $12 billion, #282 worldwide, according to Bloomberg’s Billionaire Index.
Author: 11 investment books, including four New York Times Best Sellers.

Fisher Investments research team surveyed outlooks from major Wall Street pundits, and the takeaway is that most are predicting “average” US stock returns for 2026 and less for European stocks.”

Goldman Sachs forecasts Europe’s GDP will grow just 1.3% in 2026, down from 1.5% in 2025. It expects the U.S. economy to grow by 2.7%.

Since the market loves to disappoint the masses, Fisher believes it will be anything but an average year.

And while he notes that US stocks face typical headwinds until the mid-term elections, he also points out that typical weakness may mean a backend-loaded surprise in the fourth quarter as “stocks often grind early” but “political headwinds typically flip to tailwinds as the election concludes, uncertainty falls, and congressional gridlock rises. Stocks love this, and the three-quarter “Midterm Miracle” ensues.”

The midterm miracle Fisher references: Buying on the midterm election day has historically produced a median return of 15.2% through June 30 of the following year, with a 100% win rate.

Bullish doesn’t mean riskless

One reason why the U.S. is underperforming Europe is that while expectations for Europe are low, setting an easy bar to overcome, they’re high for the U.S. after three consecutive years of double-digit returns for the S&P 500.

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The higher bar for the U.S. means it’s more challenging to surprise to the upside and attract new capital. Most have already warmed up to the U.S., making it more at risk of a downside surprise than Europe.

“It is never about if things will be good or bad but whether they will be better or worse than people currently think. Europe is screwed up but not as badly as commonly presumed,” wrote Fisher. “It isn’t that the US is bad, just not as good as previously presumed (or currently presumed).”

One risk signal Fisher is watching: The IPO market.

A number of very large IPOs ($100 billion and up) are slated for 2026, including Elon Musk‘s SpaceX, Kraken, Databricks, and AI powerhouse Anthropic, which is backed by Amazon.

How investors react to those IPOs will be telling, providing critical insight into sentiment that could help inform whether stocks are likely to reward or punish investors.

“We’ve never seen mega IPOs like that,” said Fisher. “How they are received by the public is a good indication of are we in a euphoric world or not?”

Fisher argues that if these mega IPOs get bought out of the gate and head higher, it would suggest overly optimistic sentiment that could be troubling.