State of The Themes: February 2026
The strongest themes + setups in the market.
Themes that are considered “hot” can change quickly.
If you recall, two of the most dominant themes of December and January were space and drones. These two themes provided massive gains across various names whether it was RKLB, ASTS, AVAV, KTOS, etc.
That’s why I strongly believe it’s important to stay in tune with what themes are acting well and leading the market, you can find some of your biggest gainers across these groups.
I want to quickly respond to a popular question I get pretty often. One thing many people ask me is “what is the difference between a sector and a theme?” This is a very good question.
A sector is something like technology, energy, healthcare, or financials. These are broad classifications used to group companies based on what they do as a business.
A theme is different. A theme cuts across multiple sectors and is usually driven by a larger shift in technology, narrative, or behavior. Something like AI, domestic semiconductor manufacturing, drones, or memory are themes. They can pull companies from different sectors into the same narrative because they are all benefiting from the same underlying change.
For example, AI is not a sector. It includes semiconductor companies in technology, utilities and power producers in energy, industrial companies building infrastructure, and even software to a degree. The opportunity exists across sectors because the theme itself has multiple different “tentacles.”
Understanding this distinction matters because although sectors rotate often, strong themes tend to persist much longer.
You can identify a theme in a few ways.
It requires paying attention to the world beyond just the ticker symbols and earnings announcements. Investors who spend most of their time staring at their screen miss the evolving context that actually move markets. The most powerful trends begin in:
Political-government decisions-orders
Energy constraints
Technological breakthroughs
Scientific publications
Product announcements or events
Regulatory changes
Security or geopolitical conflicts
Consumer behavior trends
Infrastructure bottlenecks
There are plenty of ways a theme can show itself, but the most reliable way is through the little under appreciated nuggets outlined above.
When you have multiple stocks across a group or theme moving higher at the same time, that’s a clear indication that accumulation across a theme is taking place. Even laggards can act well when a theme is strong and oftentimes the stocks with the worst fundamentals actually outperform. We saw this with nuclear, when something like OKLO went up thousands of %, but the highest quality nuclear name in the market CEG only went up a few hundred %.
In the remainder of this article I’m going to run through which themes have been hot over the last month and which are potentially getting ready for their next moves higher. I’ll walk through the individual stocks within each group, the charts and setups I’m watching, and how I’m thinking about each theme. The goal here is to understand where we are in the market cycle so far this year and where opportunities could be developing.
Let’s dive in.