Tom Gardner's 2026 Outlook: Volatility, Government Scrutiny, and Two AI-Adjacent Stocks

Motley Fool co-founder and CEO Tom Gardner reflects on a fresh stretch of market volatility, why investors should plan for sudden drawdowns, and how a diversified, long-term approach can help you stay steady when markets get painful.

Also in this video:

• A reminder from market history: how peak-to-trough declines (including the Nasdaq's 2000–2002 collapse) can test even experienced investors.

• Why today's AI boom differs from the dot-com era -- and where the "bubble" may be forming this time.

• A simple portfolio risk check: what happens if your biggest position falls 40% and never comes back?

• Two companies Gardner highlights as potential beneficiaries of his thesis: EMCOR (NYSE: EME) and Moderna (NASDAQ: MRNA).

A full transcript is below the video.

This video was published on Feb. 4, 2026.

I'm Tom Gardner, a co-founder and CEO of The Motley Fool, and someone who has and will forever love the public markets business and the opportunity to make investments together. I would like to start by thanking our members for being members of The Motley Fool. You're the reason that we're here doing the work that we do every day. We've made it through a period of great volatility once again at The Motley Fool.

It's been thirty years of this. There are certain times where the volatility is extremely painful. These twelve weeks taught us again that we want to set our plans up across all Motley Fool members to be able to withstand short-term volatility, which you have to almost either accept or maybe even seek out and look forward to it.

Have some plans of how you're going to act when you see your stocks suddenly fall anywhere from fifteen to forty percent quickly. It's going to happen again. We went through it here, you know, this spring, and here we are on the other side of it, having stuck to our principles, stuck to our long-term approach, and having the enthusiasm of long-term investors that are excited to find the next great investment. But the truth is there can be long stretches of market declines.

And during those periods, our members are telling us they would like to make money. And we all know it cannot be guaranteed to make money over a single year. One out of three years, the S&P 500 is down. You know, you go out a five-year period, there's still ten to twenty percent of the five-year periods in history where you have a chance of being down. You're not down very much, but you can be down.

But let's go to the more peak-to-trough scenarios in history and start to see the challenge of making money in these environments. The Nasdaq, in 2000, was at 5,000. It basically peaked right around 5,000. Okay? Then it fell to 1,100. We're talking about a seventy-eight percent decline in two years.

So take all of your stocks right now, and reduce them in value by seventy-five percent, and tell me how you feel. And if the way you feel is like, "That's just the way things happen, I'm OK," then you can probably continue to be somewhat aggressive in your portfolio. But if the thought of being down seventy-five percent, or fifty percent, or thirty percent is a dramatically bad thing for you, you probably want to start making some of these shifts in the portfolio that we're going to talk about today. Because the stretch from the Nasdaq in 2000,it did not sustainably get above that 2000 price of 5,000 on the Nasdaq until 2016, a sixteen-year period where you were still below.

Right? And I'm talking about the very peak. Like, who's buying on the top, you know, that one single day, and who's waiting all the way till... I understand we're hopefully regularly investing throughout and getting better prices. But in general, if we could go back in history and see some of these peak price moments, we'd probably take some actions differently.

We certainly wouldn't be chasing after the new IPO. We'd probably be leaning more toward cautious investments.

In past quarterly calls, we've talked about some of the investments, quote-unquote, that I think you should avoid: sports betting, penny stocks, using leverage and margin, and day trading. But I'm going to add an unusual one to the list now, and that is I'm going to ask every single member to look at the position in their portfolio and to see, you know, if that position fell forty percent and never came back, would that be a problem? Because that is actually a greater speculation for you than what people are putting into a penny stock or what most people are putting on sports betting platforms. So the real risk for you is: you've got a position. That stock has grown to become eleven percent of your portfolio. It falls forty percent and never comes back. And if that feels ruinous or calamitous to you, you have taken on too much risk.

There are a lot of parallels and worthy comparisons between what's happening in the market today and what happened twenty-five years ago with the incredible boom of internet stocks and the dot-com collapse. Let's start with what's not comparable, though. So the first thing that's not comparable is companies are making investments that are either breakeven or profitable. So this isn't a heavy infrastructure spend. We had to lay down the pipes. We had to build the internet. AI is getting to ride on top of that infrastructure right now.

So mostly, infrastructure companies are light companies like NVIDIA. Right? They're chips. Right? So we're not seeing the heavy, heavy investments we saw to commercialize and bring the internet to households across the world. That has been built. So AI will be much more profitable.

The companies back twenty-five years ago,first, a lot of them were going public very quickly. You would have a company created and five months later it would go public. And money that was going into them was being spread across so many businesses. You were diluting the quality of companies, and you were putting a lot of retail investors at risk, thinking, "This sounds exciting. This could change the world." But there wasn't enough talent. There wasn't enough good commercial insight. It was reckless, and the businesses had no opportunity off-Broadway to practice that show and make it great. Right? Everything was just going center-stage Broadway right away, and it wasn't looking very good.

That's not happening now. We don't have a lot of companies rushing to the public markets today. But what we do have is a rising enthusiasm for an acronym like "AI", ".AI" ".com," right? We're going to see more and more of that. I think the bubble is fully formed for AI in the private markets.

The Motley Fool has a system of investing that our members, I think, interact with in different ways. So we have so many members that have invested successfully for long periods of time, and they've modified their own system. For us, the system of investing in The Motley Fool begins with a belief that for many investors, diversification is a very good idea.

Diversification ensures that you don't get caught in a trap in one particular area in the market that has mediocre results for a long period of time. It gets you out of the anxiety of worrying about the performance of any single investment. That's essential for so many people.

For somebody who wants to just go for it, they're like, "Hey, I want maximal wealth, and my system is I'm going to put every dollar that I have for long-term investment in three companies." There are people that do that. They have their approach.

For The Motley Fool, across all investors around the world that are tapping in with us, we think a minimum of twenty-five stocks, an average holding period for those investments of five years, ideally, ability to add money along the way, and then it starts to move to unique multiple systems inside The Fool. Right? In the Hidden Gems approach, we suggest having ten percent of your portfolio in cash. Right? There are a number of different distinct features, but at the highest level of The Motley Fool, we believe in twenty-five stocks, five-plus years, and continually add cash.

It may sound hyperbolic, but this moment in time, this day, as I'm speaking right now, I am more excited about investing than I have ever been in my lifetime.

I am more excited not by the valuations, because valuations are rich in the U.S. Opportunities will be harder to come by of big multibaggers. I think it's better to position ourselves a little bit cautiously and defensively. But the reason that I'm more excited than ever before is the opportunity to learn is unmatched right now.

The opportunity to learn more about companies, and what we're working on behind the scenes on scoring systems,the work that I'm doing every day right now at The Motley Fool is... I would almost say five times more exciting than it was ten years ago because of the possibilities that we have.

Thank you for watching the highlights of our work on the quarterly call over the last year. We've so enjoyed creating these for you. I hope you've taken a lot of useful information and ideas about the new direction for businesses, technologies, the markets, and how to think about the important decisions we make as investors looking out five-plus years. That's what The Motley Fool's all about.

We're looking to make great investments in dynamic trends as early as possible in those trends, and in the greatest companies feeding those trends, and really looking at the leadership and the strategy of the company, the financials, and looking out five years, seven years, ten years, because that's where we get the fifteen-bagger, the twenty-five-bagger that can transform the wealth in your family for your generation and generations to come. That's the spirit and the aim of The Motley Fool.

Now I think it's time to close with a prediction and two stocks that I think will benefit in some way, directly or indirectly, from this prediction.

I think that in the next twelve months, we're going to see more intervention from the administration into the working approach of the large technology companies.

To this point, it's been an all-you-can-eat buffet in energy for large tech. We're seeing them race to build data centers, to accelerate compute power so that we can feed the demands of AI, and the amazing breakthroughs that come from these new technologies.

I think there are going to be costs that are going to come land at the feet of these large technology companies. We're already seeing signs of that, but I think this is the beginning of government intervention on the largest technology companies to make sure that, whether they're gobbling up personal data of individuals, using up mass amounts of energy that are driving up utility bills, I think we're going to start to see almost the beginnings of what happened to Microsoft twenty-five years ago.

And that doesn't mean not to invest in these companies or to sell shares of these companies. I do think it does mean to really concentrate on starting to diversify away, if you have not already, from the large tech companies, which means, you know, diversifying away from the index fund,capitalization-weighted index funds that so many investors own so smartly for so many years. It doesn't mean, again, selling. It just means starting to add new money and new thinking around companies that aren't in the white-hot center of large tech, mass energy consumption, vacuuming data everywhere they can, and not having a lot of oversight, and making sure that that's contributing to a benefit at the societal level rather than just at the shareholder, executive comp, and business success levels.

And, obviously, all the great use cases for their wonderful technologies they created, but I think now a new stakeholder is going to enter the field of play for these large technology companies, as it did with Microsoft twenty-five years ago. I think we're going to see that more clearly here in the next year.

And so what two companies might benefit from that? Well, I would say before I give the two companies, you know, start to concentrically move out from the large tech companies.

If there are limitations placed on large technology companies, who else might benefit from it?

So the first one I'm going to actually mention is EMCOR, ticker symbol EME. And think of EMCOR as helping in the data center build-out, installing all of the critical mechanical and electrical systems for the mission-critical dynamics of data centers primarily. Obviously, they do work across factories and hospitals and other businesses, but the main driver of EMCOR's business is what's happening in data centers.

So I don't think we're going to see that we're going to hit a wall. I think the large tech companies are going to have to pay up more and more for the energy costs, but we're still going to see data center build-out. So you can continue to benefit from the growth of AI, and what's going to happen with agentic AI is going to be transformative in the next twelve months. It's wild what's about to happen right in front of us.

And I think a company like EMCOR, which has already been a great stock for us at The Motley Fool and a great stock before we recommended it, is going to continue to have a wonderful year and next five years ahead.

The second company is a turnaround for us in Hidden Gems at The Motley Fool: that is Moderna, ticker symbol MRNA. You may wonder, well, what does large tech intervention on energy costs have to do with Moderna? I'm just simply moving us to diversify into other areas of the market from those major focus on these largest technology companies.

And Moderna is going to benefit, a lot of biotech companies are going to benefit, from what's going to happen with AI, because AI is going to allow you to race through drug discovery, have a higher probability of success as you're going through the regulatory process, compress all the clinical timelines.

AI technologies, generative AI, LLMs, and agentic AI, are going to massively benefit the most innovative companies in the world of drug discovery. So, Moderna has been a wonderful turnaround so far for us in Hidden Gems. It's more than doubled here over just the last couple of months, but I think it's got a very bright future here looking out five years, and I think we'll see that a little bit more clearly a year from now as we see what this technology means to a business like Moderna.

So EMCOR is ticker symbol EME. Moderna is ticker symbol MRNA.

I'm suggesting that we continue to diversify away from super-large tech and the concentration of popular index funds, and that we expect some greater federal government involvement in what's happening at large technology companies to make sure, particularly as we might see so much remapping of employment, that the largest companies in the United States are contributing to the stakeholder that doesn't benefit. Maybe they're not a shareholder of the company. Maybe they're not employed by the company. Maybe they got laid off by the company.

And we're going to start to see some of those costs come to the feet of large technology companies, which will slow some of their margin expansion, some of their growth rates. Again, I don't think it means to sell them. I just mean to me: let's keep looking for a diverse portfolio, twenty-five-plus stocks, five-plus-year holding period. That's the spirit of what we're working on together.

Thank you so much for watching this highlight reel of our quarterly calls. This last little closer on a few predictions for the year ahead. And, of course, I look forward to our quarterly call and to meeting up out in our community and continuing to study companies in all the services and solutions and portfolios we run at The Motley Fool.

I hope you're already off to a great start in 2026, and I wish you the best of luck with your investments--and Fool on.

Tom Gardner has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends EMCOR Group and Moderna. The Motley Fool has a disclosure policy.