Why I still favor select AI stocks and why I’ve moved out of almost all my gold miners

As the 2026 midterm elections approach, the United States financial markets are navigating a complex intersection of political uncertainty, persistent inflationary pressures, and a transformative shift in the technology and energy sectors. On November 2, 2026, veteran investor Louis Navellier, editor at Growth Investor, released an updated market thesis emphasizing a strategic pivot away from traditional hedges like gold mining stocks in favor of high-growth artificial intelligence (AI) equities and domestic energy infrastructure. This shift comes at a time when Wall Street remains divided over the sustainability of the "AI boom" and the long-term trajectory of interest rates.

The Macroeconomic Environment and the "Wall of Worry"

The current economic climate is defined by what market analysts often call a "wall of worry." Despite the Federal Reserve’s efforts to stabilize the economy over the past 24 months, interest rates have remained at elevated levels compared to the previous decade. Inflation, while down from its 2022-2023 peaks, is described by Navellier and other institutional observers as "sticky," particularly in the service and energy sectors.

The looming midterm elections on November 3, 2026, have added a layer of volatility. Historical data suggests that markets often experience heightened fluctuations in the weeks leading up to a vote, as investors price in potential changes in fiscal policy and regulatory oversight. However, Navellier argues that the underlying corporate fundamentals are currently stronger than the political noise suggests. He points to a robust earnings environment characterized by surging order backlogs and upward revisions in earnings estimates, particularly among companies integrated into the AI supply chain.

The AI Trajectory: From Speculation to Fundamental Growth

A significant portion of the current market debate centers on whether Big Tech’s massive capital expenditure (CapEx) on AI infrastructure is yielding sufficient returns. Skeptics have raised alarms, suggesting that the industry may be in a bubble reminiscent of the late 1990s.

However, data from the third-quarter 2026 earnings season indicates that the demand for AI hardware and software remains aggressive. Major cloud service providers have continued to report double-digit growth in AI-related revenue. Navellier’s strategy focuses on "select" AI stocks—those that pass a rigorous eight-factor fundamental model. This model typically evaluates variables such as sales growth, earnings momentum, operating margins, and cash flow.

By focusing on companies with tangible backlogs and rising analyst estimates, Navellier distinguishes between speculative "AI-adjacent" firms and the core infrastructure providers that are essential to the global digital transition. This approach suggests that while the broader sector may face volatility, companies with high-quality fundamentals are likely to decouple from the general market noise.

The Strategic Exit from Gold Miners

In a notable shift in portfolio composition, Navellier has liquidated positions in almost all gold mining stocks. Traditionally, gold is viewed as a safe-haven asset during times of high inflation and geopolitical instability. However, the performance of gold miners in 2025 and 2026 has been hampered by several factors:

1. Rising Operational Costs: Despite high spot prices for gold, mining companies have faced significant increases in labor, machinery, and energy costs, which have compressed profit margins.
2. Opportunity Cost: With high-growth equities providing superior returns, the capital previously allocated to gold is being redirected to sectors with higher earnings velocity.
3. Real Yields: As long as interest rates remain elevated, the "carry cost" of holding non-yielding assets or their proxies (like miners) remains high compared to growth stocks that are aggressively growing their bottom lines.

This move signals a broader confidence in the resilience of the U.S. equity market, suggesting that the risk of a systemic "market crash" is lower than the potential for continued growth in specific high-performance silos.

Chronology of the 2025-2026 Energy Shift

To understand the current enthusiasm for the energy sector, it is necessary to look back at the legislative milestones of 2025. Following the 2024 presidential election, a series of energy-focused policies were enacted that fundamentally altered the domestic production landscape.

• Early 2025: New legislation was signed into law requiring mandatory oil and gas lease sales in the Gulf of Mexico through the year 2040. This provided the private sector with a 15-year regulatory "green light," allowing for long-term capital planning.
• Mid-2025: Major infrastructure projects, including high-capacity pipelines and Liquefied Natural Gas (LNG) export terminals, received expedited federal approval.
• Late 2025 – Early 2026: Significant capital began flowing into midstream and upstream companies, specifically those focused on the Gulf region.
• November 2026: Current market data shows that oil refiners and tanker companies are delivering record-breaking earnings, driven by both domestic production stability and rising global demand for American energy exports.

The "America’s $31.5 Trillion IPO" Concept

Navellier has characterized this energy transition as "America’s $31.5 Trillion IPO." This figure represents the estimated total economic valuation of the untapped resources, infrastructure development, and export potential of the U.S. energy sector over the next two decades.

The focus is not merely on crude oil prices but on the infrastructure required to move and process energy. Pipeline companies, which operate on a "toll booth" model, have become particularly attractive to investors seeking both growth and income. These companies benefit from high volume and long-term contracts, making them less sensitive to daily fluctuations in commodity prices. Additionally, Gulf exploration companies are utilizing advanced seismic imaging and AI-driven drilling techniques to increase recovery rates, further boosting their fundamental scores.

Supporting Data: Energy and AI Convergence

The intersection of AI and energy is a growing area of interest for institutional investors. The massive data centers required to power AI models have created a surge in electricity demand. This has indirectly benefited the domestic energy sector, as tech giants seek reliable, large-scale power sources.

• Data Center Power Demand: Projected to grow by 15-20% annually through 2030.
• U.S. LNG Exports: Reached record highs in Q3 2026, with the U.S. maintaining its position as the world’s leading exporter.
• Corporate Earnings: Companies in the S&P 500 Energy sector have reported an average earnings surprise of 7.4% in the most recent quarter.

Industry Responses and Expert Analysis

While Navellier’s outlook is decidedly bullish on growth and energy, other market participants maintain a more cautious stance. Analysts from major investment banks have noted that the "higher for longer" interest rate environment could eventually cool consumer spending, which would impact the broader economy.

However, the consensus among growth-oriented fund managers is that the current market is "bifurcated." There is a clear distinction between "zombie companies" struggling with debt and "quality growth" companies that are self-funding their expansion through massive cash flows. Navellier’s reliance on an eight-factor model is designed to filter out the former and capitalize on the latter.

In a recent industry forum, energy analysts noted that the 2025 lease sale mandate has created a "floor" for the industry. "For the first time in a decade, energy companies have a clear federal schedule that extends nearly 20 years," noted one senior analyst. "This removes the ‘regulatory risk’ discount that has historically suppressed the valuations of Gulf-focused producers."

Broader Implications for the 2027 Outlook

As the market moves past the 2026 midterms, the focus is expected to shift toward the fiscal year 2027 projections. If the AI sector continues to meet or exceed earnings expectations, the current skepticism may fade, leading to a broader market rally. Conversely, the energy sector is positioned as a structural hedge; even if the tech sector cools, the global necessity for American energy provides a stable foundation for the domestic economy.

The transition from gold to growth equities and energy infrastructure represents a strategic bet on American industrial and technological hegemony. By prioritizing sectors with high barriers to entry, legislative support, and fundamental earnings strength, investors are attempting to navigate a "wall of worry" that shows no signs of disappearing.

The conclusion drawn by market leaders like Navellier is that while the headlines may be dominated by fears of crashes and political upheaval, the underlying data points to a period of extraordinary opportunity for those who remain disciplined and focused on fundamental excellence. The coming years will likely be defined by how well the U.S. can integrate its technological lead in AI with its burgeoning role as a global energy powerhouse.