Among the sectors outside the spotlight of AI, semiconductors, and big tech, the one that appears closest to a breakout—based on capital flows, macro alignment, and emerging narratives—is defense and aerospace, particularly modernized, dual-use defense tech. This space has been steadily building momentum since the Russian invasion of Ukraine in 2022, and with rising geopolitical tensions involving China, Iran, and an increasingly multipolar world order, it has transitioned from slow-burn to near ignition. Unlike the last defense supercycle, today’s rally isn’t only about traditional weapons manufacturers. It now includes cyber defense, autonomous drones, hypersonics, satellite networks, and AI-powered surveillance—all of which have civilian crossovers, institutional support, and budgetary tailwinds. The upcoming NATO commitments, continued U.S. defense allocations regardless of election outcomes, and EU military rearmament plans give this sector a long-duration runway. Stocks like Palantir, AeroVironment, Anduril (if it IPOs), and legacy players like Lockheed Martin are already getting premium multiples again. The defense tech rally has not fully arrived—but it’s within touching distance.
The other closest sector poised for rerating is nuclear energy and uranium mining. It’s small, underowned, and policy-driven—but those policies are changing fast. Governments across Europe, Asia, and even the U.S. are reclassifying nuclear as green, reopening reactors, and planning new ones. Japan is turning its fleet back on. South Korea reversed its phase-out. The U.K. and U.S. are funding small modular reactor (SMR) development. This policy reversal, coupled with underinvestment in uranium production and inventories, has created an explosive setup. Uranium spot prices have climbed steadily, and equities like Cameco, Kazatomprom, and smaller Canadian juniors are perking up. This market is thinly traded and sensitive to sentiment shifts. If SMRs get real commercial traction or a major geopolitical disruption hits fuel supply chains, the rally could come swiftly and violently.
A third near-rally candidate is commodities infrastructure—not just the metals, but the railways, ports, terminals, and logistics tech required to move critical materials and energy. This is a play on both deglobalization and reindustrialization. As the U.S. and EU rebuild supply chains around chips, batteries, and rare earths, the old-school enablers—think Union Pacific, Brookfield Infrastructure, and specialized logistics platforms—will become chokepoints. These are not moonshot bets but foundational to how the next global economic structure will function. Their rally will be slower, perhaps even invisible to retail, but it’s already underway under the surface.
So while biotech, agtech, and healthtech may need another 12–18 months to catalyze, defense tech and nuclear are already warming up, with infrastructure plays following closely behind. The capital is rotating—not in waves yet, but in stealth currents. The smart money is already nibbling.