Analysts have identified five investment ideas that, in their assessment, offer the most attractive risk‑return profile in the H2 2026.
This material is of an informational and analytical nature and does not constitute individual investment recommendation or advice.
Global Market Outlook for 2026
Aliyar Akymgalyiev, Analyst, Financial Analysis Department; over 5 years of cumulative experience in finance and stock market
The US stock market continues to rise, but the nature of this growth has noticeably changed. Whereas, investors could rely on broad market appreciation in previous years, the skillful selection of particular companies and sectors is becoming increasingly important in the H2 2026. The current bull market, which began after the October 2022 lows, has now lasted 45 months and delivered over 107 % in gains. This is almost in line with historical median values (56 months and +116 %). This fact alone does not imply an imminent end to the rally; however, the “buy and hold” strategy no longer looks as universally applicable as before.
The Wall Street strategists’ consensus for the S&P 500 at year‑end 2026 is around 7,600 points, with a range from 7,000 (bears: BofA, Stifel, Wells Fargo) to 8,250+ (bulls: Yardeni, Goldman Sachs, Morgan Stanley). This moderate index upside underscores the key thesis: in the current phase, returns will be driven by sector and company selection rather than by passive market buying. Notably, the aggregated 12‑month target of analysts for individual stocks within the S&P 500 stands at approximately 8,811 points (+16.8 % from current levels), and 61 % of the index’s companies carry a “Buy” rating. This gap between index expectations and bottom‑up estimates points to ongoing stock‑picking potential.
[Source: Bloomberg, FactSet Earnings Insight, S&P Global Market Intelligence; data as of June 27, 2026]
Bullish Narrative: What Is Supporting the Market
Earnings growth remains the main fundamental market driver. The S&P 500 EPS consensus for 2026 is approximately $321, versus a trailing 12‑month EPS of about $294, implying earnings growth of around 9%. In Q1 2026, the index’s EPS rose 27% YoY versus initial forecasts of about 12% — companies continue to beat expectations. High multiples (S&P 500 P/E above long‑term averages) remain a vulnerability, but they are supported by real earnings growth.
The structural driver remains the AI infrastructure cycle, though the theme is evolving. The market has stopped buying “anything AI‑related” — the focus has shifted to infrastructure beneficiaries: semiconductors, memory, networking equipment, power supply, and data centers. The expansion of market leadership beyond the Magnificent 7 into finance, industrials, healthcare, and small/mid-caps is a key positive signal: the market is gradually becoming less dependent on a narrow group of mega-caps.
[Source: FactSet Earnings Insight Q1 2026, Bloomberg EPS Consensus; data as of June 27, 2026]
Key Risks: What Could Break the Scenario
A bearish scenario does not necessarily imply a recession; a more realistic threat is a compression of multiples. A combination of four factors could trigger a rapid correction: rising oil prices (Iranian/Strait of Hormuz risk), 10‑year UST yields moving into the 4.5–5.0% range, disappointment in the ROI of AI investments, and deterioration in market breadth. None of these factors is critical on its own; it is their simultaneous realization that poses the danger.
Our Base Case and Tactics
In the base case, we maintain a constructive view on the market but shift the focus from index positioning to thematic exposure. Priority baskets: AI infrastructure (semiconductors, memory, networks, power supply), financials, healthcare, and high‑quality small/mid-caps. When corrections occur, investors may view them as potential entry points into quality ideas rather than as opportunities to average the broad index. When assessing the market situation, analysts recommend paying primary attention to EPS revision dynamics, hyper‑scalers’ capex plans, and the behavior of 10‑year USTs.
Top-5 Investment Ideas for the H2 2026
Below are five stocks that, in our view, offer the most attractive risk/reward in the current market context. The ideas cover key themes we consider most relevant in the H2 2026: AI infrastructure, memory cycle, next‑generation networking equipment, electrification, and optical communications.
Idea Selection Methodology
Stocks were selected based on the following criteria: (1) Upside to target — upside potential to the consensus 12‑month price valuation with positive targets; (2) Valuation via P/E, Forward P/E, EV/EBITDA, P/S, P/FCF relative to historical ranges and sector peers; (3) EPS — positive earnings momentum over recent quarters; (4) Sector momentum — belonging to a sector with positive momentum and growing institutional investor allocation; (5) Large cap + Liquidity — trading volume and meaningful market cap, ensuring position feasibility for a wide range of investors; (6) Risk/reward — upside potential vs. possible downside of at least 2:1 over a 12‑month horizon; (7) Analyst rating — at least 60 % “Buy” recommendations from sell‑side analysts; (8) Internal QMV metric — our proprietary stock valuation model assessing business quality (Quality), price momentum (Momentum), and undervaluation (Value); (9) Relative Strength (RS) — stock performance relative to the S&P 500 over the past 6–12 months.
1. NVDA — NVIDIA Corporation
Sector: Semiconductors / AI Infrastructure
Investment thesis: global leader in AI accelerators and one of the main beneficiaries of artificial intelligence development. Analysts highlight sustained demand for the Blackwell platform, growth of the CUDA ecosystem, and expanding corporate adoption of AI.
Analysts’ average target price: $310
Upside potential: More than 55 % over a 12‑month horizon
Key risks: primarily related to the company’s high market valuation, a possible slowdown in AI infrastructure investments, intensifying competition, and regulatory constraints.
2. ANET — Arista Networks
Sector: Networking Equipment / AI Infrastructure
Investment thesis: the company benefits from growing AI data center construction and rising demand for high‑speed Ethernet solutions for cloud infrastructure.
Analysts’ average target price: $190
Upside potential: More than 16 % over a 12‑month horizon
Key risks: include a slowdown in CapEx by major cloud providers, intensifying competition, and shrinking corporate IT budgets.
3. MU — Micron Technology
Sector: Semiconductors / Memory and Data Storage
Investment thesis: one of the largest producers of DRAM and NAND memory, which may benefit from rising demand for HBM memory and a recovery in the memory market.
Analysts’ average target price: $115
Upside potential: More than 10 % over a 12‑month horizon
Key risks: cyclicality of the memory market, possible decline in DRAM and NAND prices, and shifts in supply/demand balance.
4. ETN — Eaton Corporation
Sector: Industrials / Electrical Equipment
Investment thesis: the company is one of the beneficiaries of rising investments in power systems and AI data center construction.
Analysts’ average target price: $464
Upside potential: More than 13 % over a 12‑month horizon
Key risks: related to a possible reduction in infrastructure investments, slowing industrial production, and pressure on margins.
5. GLW — Corning Incorporated
Sector: Materials / Optical Infrastructure
Investment thesis: one of the key suppliers of optical infrastructure solutions, in demand for AI data center construction.
Analysts’ average target price: $220
Upside potential: around 5 % over a 12‑month horizon
Key risks: slower AI infrastructure development, declining demand for telecom equipment, and high capital intensity of production.
Thus, the potential for further returns today depends less on overall index performance and increasingly on the right selection of particular companies.
Kazakhstan Market
Ansar Abuyev, Analyst, Financial Analysis Department; over 9 years of experience in finance and stock market
In H1 2026, the KASE Index rose 9.3%, outperforming the S&P 500 (+7.5%), and with the tenge strengthening, the market’s dollar‑denominated return reached about 14%. Exporters drove most of the gains: Kazatomprom, KazMunayGas, and Solidcore.
In Q2, the market entered a consolidation phase amid external factors, including increased volatility on global markets. An additional driver was the reduction of the base rate from 18% to 17%, which supports investor interest in the Kazakhstan market in the second half of the year.
The summer period is traditionally quiet for KASE, but the market retains upside potential. One key supporting factor could be the continuation of the monetary policy easing cycle. Further cuts to the base rate could make equities more attractive compared to bank deposits and bonds. Additional support comes from slowing inflation and a stable tenge exchange rate. In August, investors’ attention will focus on companies’ H1 financial reports, which will help assess dividend payout prospects and may spur renewed interest in dividend stocks.
At the same time, investors should also consider possible risks. If the base rate declines more slowly than expected or inflation accelerates again, this could pressure stock prices, especially in the banking sector. For export‑oriented companies such as KazMunayGas and Solidcore Resources, a further tenge appreciation is an additional risk, as it could reduce their tenge‑denominated revenue. For KEGOC and KazTransOil, the regulator’s tariff policy is a key uncertainty: if new tariffs fall below expectations, this could negatively affect the companies’ future revenue and net profit.
Based on the current market situation, we highlight five companies on the Kazakhstan stock market that, in our opinion, offer the most attractive potential return/risk profile in the H2 2026.
1. Halyk Bank of Kazakhstan JSC (HSBK)
Target Price: KZT 450
Upside Potential: 20.2%
One of the strongest “portfolio” stocks on the Kazakhstan market thanks to a combination of steady growth, high dividend yield, and solid financial metrics. The latest dividend payment was KZT 30.1 per share, and with expected dividends, the annual yield could reach 15–16%, among the best levels in the market.
An additional advantage is the company’s low valuation: its P/E ratio is around 4x, while the largest US banks trade in the 14–16x range. This suggests continued upside potential for the stock.
[Source: Freedom Broker Analytical Review “Halyk Bank: Q1 2026 Report”]
2. KEGOC JSC (KEGC)
Target Price: KZT 2,180
Upside Potential: 51.6%
KEGOC shares suit investors seeking a more defensive instrument. The stock is less sensitive to market volatility and retains high dividend appeal and strong financial metrics.
In Q1 2026, the company fixed record quarterly revenue thanks to higher electricity transmission tariffs. Tariff increases directly improve the revenue and EBITDA outlook, boosting the stock’s fair value.
[Source: Freedom Broker Analytical Review “KEGOC: Q1 2026 Results”]
3. KazMunayGas JSC (KMGZ)
Target Price: KZT 39,100
Upside Potential: 17.25%
KazMunayGas remains one of the main beneficiaries of high oil prices. Despite a decline in Brent prices, the effect of higher prices in prior months will continue to show up in the company’s financial results.
In Q1, the average oil price rose 7.1%, enabling a 11% YoY increase in revenue to KZT 2.48 trillion and growth in key joint ventures’ profits.
[Source: Freedom Broker Analytical Review “KazMunayGas: Q1 2026 Results”]
4. KazTransOil JSC (KZTO)
Target Price: KZT 1,490
Upside Potential: 32.7%
In Q1, KazTransOil significantly improved its financial performance thanks to higher tariffs and increased oil transportation volumes. Net profit rose 81% YoY, and operating cash flow doubled.
Cash and current financial assets reached a record KZT 155 billion, strengthening the company’s dividend potential. The latest dividend of KZT 118 provided a yield of about 10%.
[Source: Freedom Broker Analytical Review “KazTransOil: Q1 2026 Results”]
5. Solidcore Resources (CORE)
Target Price: $9.6
Upside Potential: 14%
Solidcore benefits from rising gold prices, although the market is currently under pressure from the Fed’s hawkish stance on interest rates. If rates are revised and the tenge weakens toward year‑end, the company could receive additional support from higher foreign‑currency revenue, which would positively affect its financial performance.
[Source: Freedom Broker Analytical Review “Solidcore: H2 2025 Results”]
Disclaimer
Freedom Finance Global PLC (Licence AFSA‑A‑LA‑2020‑0019, issued by AFSA within the AIFC, www.fbroker.kz). Investments in securities always involve the risk of capital loss. Detailed information about risks can be found in Annex 4 to the Regulation on the Provision of Brokerage (Agency) Services in the Securities Market of Freedom Finance Global PLC, available on our website. Past performance does not guarantee future results.
This material is for informational purposes only and does not constitute investment recommendation or advice, an offer, or a solicitation to buy or sell any financial instruments. All investment decisions are made independently, and the investor bears full responsibility for their actions. For more detailed information, please consult your financial advisor.