As investors fixate on artificial intelligence and the next Nvidia earnings report, a different sector is quietly posting some of the year's best returns. The materials sector—encompassing everything from copper miners to construction aggregates—has emerged as an early 2026 leader, driven by trends that could persist throughout the year.

Construction materials giants Vulcan Materials (VMC) and Martin Marietta (MLM) are both posting strong gains, while copper producers benefit from the massive infrastructure buildout powering the AI revolution.

The Construction Materials Story

"Each with a $40 billion market cap, Vulcan and Martin Marietta are the closest thing we got to blue chips in this sector," noted market analyst Josh Brown, highlighting why these names are attracting institutional attention.

Vulcan Materials holds a particularly strong position as the largest U.S. producer of construction aggregates—the crushed stone, sand, and gravel that form the foundation of infrastructure projects. The company's quarries are concentrated in high-growth regions, giving it local pricing power that translates to consistent margin expansion.

What's driving the sector:

  • Infrastructure spending: Federal infrastructure investments continue flowing into projects across the country
  • Data center construction: AI buildout requires massive new facilities, each demanding enormous quantities of construction materials
  • Housing market recovery: Lower mortgage rates are stimulating residential construction activity
  • Reshoring trends: Manufacturing returning to the U.S. means new facilities requiring materials

Copper: The AI Metal

Perhaps no commodity tells the AI story better than copper. The red metal is essential for everything from data center electrical systems to the renewable energy infrastructure powering them.

"Copper and precious metals equities are positioned for continued growth in 2026, and chemicals firms supporting the massive artificial intelligence build-out could continue to show strength."

— Fidelity Sector Outlook

The bull case for copper is straightforward: supply is increasingly constrained while demand continues to grow. Every AI server, every electric vehicle, every solar installation requires significant copper. Major producers like Southern Copper are actively expanding operations to meet anticipated demand.

Top Performers

The materials sector has produced some impressive individual stock returns:

  • Centerra Gold (CGAU): Up 163.92% over the past year
  • Perma Pipe International (PPIH): Up 120.01% over the past year
  • Commercial Metals Co (CMC): Up 54.53% with a consensus Strong Buy rating

These gains highlight the sector's potential for outsized returns when commodity prices and demand align favorably.

The Precious Metals Factor

Gold's surge to record highs above $4,600 per ounce has lifted the entire precious metals complex. Gold miners like Newmont Corp are benefiting from the combination of elevated prices and improving operational efficiency.

The thesis extends beyond gold. Palladium has surged over 107% in recent months, while platinum broke above $2,400 for the first time ever. Silver continues climbing toward its 1980 highs.

For investors seeking materials exposure, the precious metals miners offer both commodity leverage and equity upside.

Leaders by Market Cap

The largest materials companies represent the sector's blue-chip core:

  • Linde: The industrial gas giant leads by market cap, with substantial clean energy investment plans
  • BHP Group: Emphasizing copper with significant sustainability targets
  • Southern Copper: A top global copper producer actively expanding operations

These established names offer more stability than smaller miners while still providing meaningful exposure to commodity price movements.

Risks to Consider

Materials stocks aren't without challenges. The sector is inherently cyclical, sensitive to economic slowdowns that reduce construction activity and commodity demand. China's economic trajectory remains a key variable, as the country consumes vast quantities of industrial materials.

Additionally, the sector faces inflationary pressures on labor and energy costs that can compress margins even when commodity prices are favorable.

The Investment Case

For portfolios heavily weighted toward technology, materials stocks offer genuine diversification. The sector tends to move independently of tech, providing balance when growth stocks correct.

More importantly, the fundamental drivers—AI infrastructure, reshoring, electrification—represent multi-year trends that could support materials demand well beyond 2026.

As one analyst put it: "Everyone's watching the AI software plays. But someone has to build the data centers, wire them with copper, and pave the roads leading to them. That's the materials opportunity."