Wondering which sectors are geared up for growth next? We asked analyst and stock market savant, Grady Wulff, who gave us a few hints.

Global sharemarkets are sitting at or near record highs, but Bell Direct analyst Grady Wulff says investors should not assume that all sectors are equally well-placed to keep rising.

While stability is returning to the global outlook after tumultuous geopolitical happenings, the real opportunities and risks lie beneath the surface.

Wulff points out that after a difficult FY25, when markets had to weather a storm of headwinds from Trump era tariffs to stubborn inflation and China’s patchy recovery, investors are now looking for clarity in FY26. Some sectors, she says, are offering just that.

Healthcare: poised for a comeback

Healthcare stocks, long overlooked since the pandemic, may be on the verge of a turning point. Wulff argues that catalysts are building thanks to long-awaited trial results.

“I think the healthcare companies have been quite unloved for quite some time since Covid,” she said.

“I think there’s some really big catalysts coming out in the coming days, in coming weeks and some trial results that I’m waiting for.

"Clarity Pharmaceuticals, I’m waiting for some of their trial results to come out — a fantastic company. They’re working in the cancer imaging and therapy space, and Neurone Pharmaceuticals is the second drug, currently in phase three trials. So those are two that I’m watching at the moment.”

Her comments underline the potential for biotech and pharmaceutical firms to surprise the market, particularly where breakthrough therapies can shift investor sentiment quickly.

Niche retailers: defying expectations

If there was one surprise from reporting season, Wulff says it was how resilient consumers have been and how that resilience has filtered into retail stocks.

“The retailers, the nice retailers are still really [impressive]. I love the fact that they’ve just continued to outperform expectations and defied expectations,” she said. “These are the ones that really surprise us reporting season and continue to do so with a strong start to FY26.”

Despite high rates and cost of living pressures, companies like Baby Bunting, JB Hi-Fi and Temple and Webster had already delivered stronger than expected results earlier in the season. Wulff suggests that momentum remains intact. It is a reminder that Australian consumers are still prepared to spend in the right niches.

Materials: Copper shortage could turn into market gold

While many of the big miners have had mixed results, Wulff sees the real opportunity sitting in the smaller end of the sector, particularly those exposed to copper.

“I also think that the...materials space, is going to come back through,” she said. “We’ve seen the small to mid cap space, where there’s an undersupply at the moment and a really strong [outlook] for copper to come.

"With the producers really drying up in high grade, there’s not enough high grade copper to make this green energy transition. So I think copper producers in the small to mid cap space are going to really run over the next 12 months.”

Her view reflects a broader market theme. The global transition to renewable energy has created structural demand for critical minerals, but supply is lagging. For investors, that imbalance could prove lucrative.

Why these sectors stand out

Wulff says what makes healthcare, niche retailers and materials like copper stand out is that each has clear catalysts that can drive earnings in the year ahead. For healthcare, the upcoming trial results could transform company valuations. For retailers, consumer resilience has been stronger than expected. And in materials, supply shortages are creating tailwinds for smaller miners.

She also notes that some of the broader market headwinds are already being absorbed, particularly tariffs.

“I think it’s kind of everyone’s sick of hearing the word tariff now. I’m sick of hearing the word tariff now,” she said. “I think it is well embedded into the market outlook. It’s well embedded into the investor outlook and forecasts. And every company in this reporting season is much of a muchness to say this is the impact, this is what we expect, this is what we’re allocating towards. Or if they don’t know they’re not impacted, even better. So that’s what investors are looking at: it’s priced in.”

By removing some of that uncertainty, she argues, investors can focus more closely on sectors with identifiable growth drivers rather than being distracted by macro headlines.