The IT (Information Technology) sector entered 2026 with unmatched scale but surprisingly middling recent performance. Over the past year, IT ranked just tenth among major industries, posting a 23.93 percent one-year gross total return. While respectable in absolute terms, that figure lagged behind financials at 29.48 percent, industrials at 25.79 percent, and even utilities at 24.11 percent, a traditionally defensive sector that rarely outpaces growth industries. The contrast underscores a structural shift in how returns are being generated across global markets.
The defining story of 2025 was the dominance of precious metals, not technology. Silver mining delivered a striking 207.42 percent return, while gold mining followed closely at 175.69 percent, eclipsing every other major sector by a wide margin. Even high-momentum technology adjacencies such as semiconductors, which posted a solid 50.65 percent return, fell far short of commodity-driven gains. The result was a rare year in which capital intensity, supply constraints, and macro hedging dynamics mattered more than software scale or platform dominance.
Looking beyond a single year, the five-year picture offers some rehabilitation for IT, but not a full reversal. Over that period, the sector climbs to sixth place, with a 17.88 percent gross total return. However, it still trails Gold Mining at 23.45 percent and Semiconductors at 23.08 percent, while Energy Producers (19.78 percent), Silver Mining (18.23 percent), and the broader Energy sector (17.96 percent) all edged ahead. Even over a longer horizon, industries tied to physical supply chains and resource scarcity outperformed Big Tech, challenging assumptions that technology automatically dominates multi-year return profiles.
What makes this divergence particularly striking is that IT remains the largest sector by market capitalization. Within MSCI’s free-float-adjusted averages, Information Technology ranks first, with companies in the index averaging $80.66 billion in market cap across 304 constituents. Communication Services follows at $64.82 billion across 123 companies, anchored by firms such as Alphabet and Meta. Semiconductors come next, averaging $43.19 billion across 249 companies, led by industrial linchpins like Broadcom and ASML.
At the very top of the market, IT companies continue to dominate global rankings by sheer size. NVIDIA closed 2025 as the world’s largest company by market capitalization at $4.56 trillion, followed by Apple at $4.06 trillion and Microsoft at $3.63 trillion. Alphabet ranked second overall, representing Communication Services, while Amazon held fifth place as the largest Consumer Discretionary firm. These valuations reinforce the sector’s concentration of economic power, even as returns disperse unevenly beneath the surface.
Complicating sector analysis further is the increasing overlap between IT and semiconductor benchmarks. Companies such as NVIDIA, Broadcom, ASML, and TSMC appear across multiple indexes, reflecting how deeply software, hardware, and fabrication are now intertwined. This structural integration means that headline IT performance increasingly masks a split between capital-intensive infrastructure leaders and more cyclical or consumer-exposed technology firms.
That bifurcation is expected to sharpen in the year ahead. “Looking ahead to 2026, IT sector returns are expected to become increasingly bifurcated,” said Alan Goldberg, analyst and author at BestBrokers. “Companies with direct exposure to high-growth areas such as AI acceleration, cloud infrastructure, and advanced semiconductor fabrication are well positioned to outperform, benefiting from strong adoption trends and enhanced pricing power. In contrast, firms reliant on consumer-driven hardware or cyclical IT services may continue to face margin pressure and subdued growth.”
Goldberg added that the structural integration of IT with the semiconductor ecosystem reinforces both the sector’s strength and its internal concentration. “The deep coupling we see in NVIDIA, ASML, Broadcom, and TSMC concentrates value in a relatively small group of firms. Overall, 2026 is likely to favour IT companies with scalable, innovation-led revenue streams, while aggregate sector returns may trend closer to long-term historical averages.”
Periods of economic uncertainty have historically driven investors toward precious metals such as gold and silver, which are widely viewed as stores of value during inflationary, geopolitical, or monetary stress. The outsized gains seen in gold and silver mining in 2025 reflect this familiar flight-to-safety dynamic, as capital rotated away from growth-dependent sectors and into assets perceived as more resilient amid elevated macroeconomic risk.
An additional factor shaping these results has been the resurgence of global instability and tariff pressure, which has disproportionately favoured commodity-linked sectors over technology. Heightened geopolitical risk, trade fragmentation, and renewed tariff regimes have increased the strategic value of physical inputs such as energy, metals, and industrial materials, driving capital toward mining and resource producers as both inflation hedges and supply-security plays. Technology firms, by contrast, have faced margin compression from higher input costs, cross-border manufacturing friction, and export controls affecting advanced components, particularly in semiconductors and hardware. While large IT firms have the scale to absorb some of these shocks, tariffs and trade uncertainty have reduced operating leverage across consumer electronics, networking equipment, and lower-margin IT services, reinforcing the sector’s underperformance relative to commodities during periods of heightened global volatility.
Looking ahead, these dynamics suggest that 2026 capital allocation will increasingly bifurcate between defensive, scarcity-driven assets and a narrower set of technology firms tied directly to AI infrastructure. While broad IT sector returns may remain constrained by trade friction, tariffs, and uneven global demand, investment is likely to continue concentrating in AI-adjacent companies that control critical compute, fabrication, and data-center supply chains. The sheer market weight of AI leaders such as NVIDIA, hyperscale cloud providers, and advanced semiconductor manufacturers means their performance will increasingly determine headline IT outcomes, even as large portions of the sector lag. In this environment, AI’s dominance does not negate the macro headwinds facing technology but it does mask them, producing a market in which aggregate IT appears resilient while value creation becomes ever more concentrated in a small number of strategically indispensable firms.
For business leaders and investors, the implications are self-evident. Technology is the backbone of global market capitalisation, but it is no longer the automatic leader in returns. In a world shaped by growing political turbulence, supply constraints, geopolitical risk, and capital intensity, scale alone is no longer enough. The next phase of IT performance will be driven by stability, revenue diversity, category dominance and increasingly by where tech intersects with the physical economy.
