Business trends, wild cards and companies to watch in 2026
Financial Times reporters examine the forces likely to shape global business in the year ahead, from the durability of the defence boom and the next phase of artificial intelligence to the future of banking regulation, drug pricing and creative industries under pressure from technology.
Defence
Trend to watch
Global defence share prices and revenues have soared thanks to higher military spending since the start of Russia’s full-scale invasion of Ukraine in 2022. The world’s top 100 defence companies earned a record $679bn in 2024, according to new data from the Stockholm International Peace Research Institute, and that trend continued in 2025.
Whether the industry’s revenues can keep growing at the same rapid pace depends, in large part, on whether a peace deal can be struck between Russia and Ukraine. Investors in European defence stocks have reacted negatively every time the prospect has appeared close, demonstrating underlying scepticism about whether Europe’s rearmament drive will continue in the absence of the war.
Industry executives, however, believe that even if the conflict ends, the trend for higher military spending and demand for weapons will persist. Nato members have pledged to raise defence spending to 5 per cent of GDP a year over the next decade. Demand for new technology, including drones, military satellites and space security, will continue to drive growth.
Company to watch
Germany’s Rheinmetall is the world’s fastest-growing major defence company and has become a key player in Europe’s rearmament.
Outspoken chief executive Armin Papperger is intent on building the 136-year-old maker of munitions and armoured vehicles into a company to rival the big US contractors. Deals to expand into warship building and satellites have been struck, as have numerous joint ventures. The company’s shares have surged since Russia’s invasion of Ukraine in 2022, giving it a market value of about €70bn by the end of December.
Papperger said in November that Rheinmetall expected sales to reach €50bn in 2030, five times what it reported in 2024. Whether it can maintain its valuation this year will depend, in part, on Papperger demonstrating progress towards that target.
Wild card
Several European defence companies are considering stock market listings in the coming year to capitalise on investor enthusiasm for the sector. British metal engineer Doncasters Group, Franco-German tank maker KNDS and Czech defence company Czechoslovak Group (CSG) are among those weighing flotations.
Investors are expected to buy into these offerings, but what would really excite the industry would be the listing of a defence technology start-up. The valuations of some of the private US defence entrants such as Anduril Industries are higher than those of large public companies. Anduril has not committed to an IPO date but founder Palmer Luckey has previously said the company will “definitely” go public. The start-up has made inroads with the US and the UK military, winning contracts to supply both with advanced weapon systems. Investors are also hoping to see some action in Europe, which now has several start-ups, such as drone maker Helsing, with “unicorn” valuations of more than €1bn.
Sylvia Pfeifer in London
Banks
Trend to watch
Donald Trump’s return to the Oval Office has heralded a much more bank-friendly approach to regulation, with commitments to water down rules that forced lenders to increase their loss-absorbing capital buffers after the 2008 financial crisis.
The loosening of capital requirements is set to cement the dominance of the big Wall Street banks and boost their capacity to finance large investments in AI and data centres.
The key question for other financial centres is whether they participate in the deregulatory spree or maintain tougher rules, which gives them more protection against shocks but makes it harder to compete with the US.
The Bank of England reduced capital requirements for UK banks in December, putting it on a similar path to the US. The European Central Bank has said it will simplify bank rules, but analysts and investors regard recent proposals as trailing those of the UK and US.
European banks are likely to intensify their campaign for closer regulatory alignment with these jurisdictions, arguing that failing to do so will put them at a disadvantage.
Company to watch
One lender very much hoping for easier regulation is UBS, after the Swiss government proposed drastically increasing its capital requirements.
The government has argued that the measures are necessary to ensure the bank can absorb shocks. Its balance sheet is bigger than Switzerland’s GDP following its 2023 takeover of Credit Suisse.
UBS has said the increase is so big it will harm its ability to compete globally, and has considered moving its headquarters out of Switzerland if the reforms are not watered down.
There was some cause for optimism towards the end of 2025 when a cross-party group of politicians proposed a compromise that would significantly reduce the proposed capital burden on UBS.
The reforms will be debated in the second half of 2026. A compromise would be a fillip for UBS shares, which have significantly trailed European peers.
Wild card
Andrea Orcel and Bettina Orlopp, the respective chiefs of Italy’s UniCredit and Germany’s Commerzbank, have spent much of the past year at loggerheads over the merits of a combination of the two lenders. But they at least agree on one thing: Europe needs bigger banks.
Despite resisting UniCredit’s overtures, Orlopp has acknowledged that the fragmented banking market does not help the wider European economy.
This view has gained traction, but in practice, European bank mergers remain rare and are often politically fraught.
While some smaller deals were agreed in 2025, such as Santander’s £2.65bn acquisition of British lender TSB and BPCE’s €6.4bn swoop on Novo Banco of Portugal, several large deals collapsed or were put on hold in the face of political opposition.
In Spain, BBVA’s €17bn hostile bid for domestic rival Sabadell failed after the country’s government imposed strict conditions on the approach. In Italy, UniCredit abandoned its €10bn bid for Milan’s Banco BPM following government opposition.
Looking ahead, UniCredit still has a 29 per cent stake in Commerzbank. Although the German government is opposed to a tie-up, Orcel still has options, including pushing for board representation.
“Don’t count Commerzbank as over,” one person familiar with UniCredit’s M&A strategy recently told the FT. “There’s plenty more fuel in that tank.”
Simon Foy in London
Technology
Trend to watch
Revenue will take priority in 2026 as investors become impatient for returns on the hundreds of billions being poured into AI data centres. The result will be a much sharper divide between the early winners and losers. Markets will stop pouring cash into anything with “AI” in it, though companies showing real momentum should still end the year with sky-high valuations.
OpenAI’s launch of an advertising business will be the most significant revenue milestone of the year, and a clear demonstration of the commercial potential of a user base approaching 1bn. By comparison, AI personal shopping agents will fail to make much of a dent in the ecommerce market, partly because of resistance from companies such as Amazon.
AI adoption by business is likely to remain cautious, as companies continue to test applications and redesign processes to make full use of the technology. By year-end, though, a handful of companies will be showing breakout growth, particularly in fields such as marketing and customer service, and where there are specifically designed applications such as in finance, healthcare and law.
Company to watch
If, as seems increasingly likely, Tim Cook steps down as chief executive of Apple in 2026, it will be the end of one of the most successful runs in modern business. It will also provoke debate about what kind of leadership Apple needs — especially as it navigates the potential rise of new types of consumer AI gadgets.
Can it find a leader capable of maintaining its place as the company the rest of the industry looks to in defining the future of consumer hardware? And can it come up with compelling uses for AI in its own gadgets, rather than earning revenue on the technology from third parties tapping into its vast user base?
A successor from within Apple is most likely, with John Ternus, head of hardware engineering, seen as the leading candidate. But a hire from outside is not out of the question if the board decides a radical change in direction is called for, something that would shake the tech industry to its roots.
Wild card
A wave of M&A could reshape the AI landscape. That is most likely to happen if there is a sharp market correction that puts cash-rich incumbents in a position to do deals.
Companies most in demand would be AI model-builders such as Anthropic, Safe Superintelligence and Mistral, with Microsoft, Amazon and perhaps even Apple the most likely buyers. Start-ups with promising AI apps would also draw interest, particularly from software companies such as Salesforce and Adobe that have so far failed to catch the AI wave. Consolidation in chips would also pick up.
The biggest unknown: whether regulators will allow all-out takeovers, rather than the “acqui-hire” deals that have become common, such as Meta’s recent tie-up with Scale AI or Nvidia’s with Groq. Close ties between some Silicon Valley leaders and the Trump administration may ease the path, but regulators in Europe and China may be harder to convince.
Richard Waters in San Diego
Pharma
Trend to watch
Demand for weight-loss drugs has reshaped the pharmaceutical industry. In 2025, Eli Lilly became a $1tn company while Pfizer and Novo Nordisk competed to buy obesity-focused biotech Metsera in one of the year’s biggest takeover battles. Pfizer won out in the end.
While innovation in cancer treatments and rare disease medicines will continue in 2026, weight-loss drugs will remain the pharma sector’s main growth engine. In December, Goldman Sachs raised its forecast for global sales of these treatments to $102bn by 2030, up from a previous estimate of $95bn.
New anti-obesity treatments due in 2026 are expected to broaden the market further. Both Eli Lilly and Novo Nordisk are developing weight-loss pills. The Novo Nordisk pill was approved by regulators in December, while Lilly’s approval is expected soon. The oral treatments are seen as a complement to the injectable drugs that have driven the boom so far.
Company to watch
Novo Nordisk’s diabetes drug Ozempic captivated the world with its potential for weight loss. Its success made it Europe’s biggest company by market capitalisation at various times over the past three years. But by 2025, its lead in weight-loss drugs had been eroded by its US rival Lilly. Novo Nordisk’s falling share price resulted in the ousting of its chief executive in May.
Days after it dropped out of the bidding war with Pfizer for Metsera, Novo Nordisk said one of its diabetes drugs had failed to slow the progression of Alzheimer’s in late-stage trials. This increases pressure on the company’s recently approved weight-loss pill to deliver commercially, said Morningstar.
Novo Nordisk accounts for a third of the $80bn diabetes medicines market and half of the $15bn market for insulin. With populations ageing and rates of obesity rising, it is well positioned to remain a key player in managing related diseases. But after recent setbacks, investors will be watching closely in 2026 to see whether Novo Nordisk can regain momentum or whether its share price will continue to drift.
Wild card
The obesity market is currently dominated by Novo Nordisk and Lilly, but competition is coming. In addition to its Metsera acquisition, Pfizer recently agreed a licensing deal with a subsidiary of China’s Shanghai Fosun Pharmaceutical to develop a weight-loss drug that is currently in early-stage testing.
At the same time, generic drugmaker Sandoz has said it expects to win approval for a weight-loss drug in Canada in the first half of 2026. Canada is the second-largest market for Novo Nordisk’s Ozempic.
In China, nearly two dozen companies are preparing to launch generic weight-loss drugs, according to Goldman. In 2026, semaglutide, the active ingredient in Ozempic, is due to lose its patent protection in markets including China, India and Canada.
About one-third of people with obesity will live in a country with access to off-patent semaglutide beginning in 2026, according to healthcare consultancy Iqvia.
Weight-loss drugs have delivered outsized profits for Novo Nordisk and Lilly. But with competition intensifying and generic versions on the horizon, pressure on pricing is likely to build. The question for 2026: will investors lose their appetite for the obesity trade?
Patrick Temple-West in New York
Media
Trend to watch
In 2025, songs created by AI began to top the charts: Breaking Rust, an AI country-blues singer, and Cain Walker, an AI R&B singer, both topped a Billboard digital sales chart. On Spotify, The Velvet Sundown attracted 4mn streams for its top track, and released three albums.
As well as questions about the value and meaning of original art, these successful releases raise concerns about how the AI programs were trained and what happens to revenues. There is great uncertainty about copyright law and the line separating “fair use” of generative AI from copyright infringement, Morgan Stanley said in a year-end report. As the world’s biggest music streamer, Spotify will be at the forefront of these debates. One key question, Morgan Stanley analysts say, is whether the flood of AI music will fragment the listener base.
AI guardrails will become a bigger factor when music labels negotiate with the streaming platforms, the analysts say. “We continue to see Spotify as a long-term beneficiary of improved personalization and product efficiency (but) we also acknowledge meaningful uncertainty around how AI will influence consumption and lower the barriers to entry for new platforms,” the report said.
Company to watch
The battle for Warner Bros Discovery will dominate Hollywood’s attention in 2026. Though the WBD board has approved Netflix’s $83bn bid for the century-old studio, Paramount — led by David Ellison and backed by his billionaire father, Oracle founder Larry Ellison — has not given up. The battle for control is expected to continue well into the new year.
It has been great news for the company’s shareholders, who have watched the stock rise from a low of about $7.50 a share to $30. On Wall Street, the view is that further bids from Paramount could take it as high as $35.
But there are potential hurdles. Netflix could face close regulatory scrutiny: combined with Warner’s HBO Max streaming service, it would have 31 per cent of the streaming subscription market. Netflix argues regulators should consider YouTube when they assess the size of the market. Warner Bros also needs to spin off its cable TV business in the third quarter of 2026 before Netflix can begin to close the transaction.
Wild card
AI emerged as a flashpoint during the writer and actor strikes that brought Hollywood to a standstill for six months in 2023. Box office receipts have stagnated in the aftermath, with a shortage of new releases to bring audiences back to cinemas.
Hollywood unions are preparing to hold new negotiations in 2026. The Writers Guild of America contract expires in May, followed by others later in the year. Talks are expected to revolve around protections regarding AI use.
Morgan Stanley analysts warned of “potential production delays” if there is more industrial action.
“Given the disruptive labor strikes of 2023, these [contract] expirations represent a significant event risk — particularly as AI’s role in creative workflows is more contested today than at any point in the past decade,” they said.
Christopher Grimes in Los Angeles
