Top 2 Vanguard Sector Index Funds to Invest in Before 2026, as Recommended by Wall Street
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 09 2025
0mins
Should l Buy FDS?
Source: NASDAQ.COM
Investment Outlook: Wall Street analysts predict the highest upside in the information technology sector (21%) and materials sector (18%) for the upcoming year, with technology having outperformed the market significantly over the last decade.
Vanguard ETFs: The Vanguard Information Technology ETF focuses on U.S. tech companies, particularly in semiconductors and software, while the Vanguard Materials ETF targets companies in specialty chemicals and construction materials, both with low expense ratios.
Valuation Concerns: The information technology sector is currently trading at a premium compared to historical averages, but is expected to see substantial earnings growth. In contrast, the materials sector has underperformed historically and faces high valuations with modest growth projections.
Investment Strategy: While the Vanguard Information Technology ETF is recommended for sector-specific exposure, a broader S&P 500 index fund may be a safer choice due to concentration risks in the tech sector and the historical underperformance of the materials sector.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy FDS?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on FDS
Wall Street analysts forecast FDS stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for FDS is 295.91 USD with a low forecast of 253.00 USD and a high forecast of 326.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
12 Analyst Rating
1 Buy
7 Hold
4 Sell
Hold
Current: 209.180
Low
253.00
Averages
295.91
High
326.00
Current: 209.180
Low
253.00
Averages
295.91
High
326.00
About FDS
FactSet Research Systems Inc. is a global financial digital platform and enterprise solutions provider. The Company's solutions deliver financial data, analytics, and open technology to global clients, including individual users. Its segments include the Americas, EMEA and Asia Pacific. It provides financial data and market intelligence on securities, companies, industries and people to enable its clients to research investment ideas and analyze, monitor and manage their portfolios. It supports various workflows, including investment research, quantitative research, portfolio management and trading, portfolio analytics, wealth management, ESG investing solutions, industry analysis and data solutions. It provides open and flexible technology offerings, including a configurable desktop and mobile platform, and comprehensive data feeds. Its technology also includes LogoIntern, a workflow tool to streamline the task of adding, organizing, and formatting logos into pitch decks.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Tech Struggled in Earnings Season, But Other Stocks Are Providing Relief.
Technology Stocks Struggle: Technology stocks have experienced a challenging earnings season, indicating potential issues within the sector.
Other Sectors Performing Well: Despite the struggles in technology, most other sectors are showing resilience, which is a positive indicator for investors.
See More
Analysts Assign Buy Rating to Alphabet
- Rating Upgrade: Analysts have assigned a buy rating to Alphabet (GOOGL), indicating strong market confidence in the company's future performance and suggesting it will continue its growth trajectory.
- Price Target Analysis: The average price target for Alphabet is set at $369.30, reflecting market recognition of its potential value, which may attract more investor interest.
- Market Reaction Expectations: Following the buy rating announcement, Alphabet's stock price is expected to experience positive momentum, potentially drawing in more capital and enhancing its market performance.
- Long-Term Growth Potential: The analysts' rating and price target suggest that Alphabet's ongoing innovations in technology and advertising will support its future profitability, strengthening its position in a highly competitive market.
See More
Amazon's Earnings Miss Expectations, Shares Drop
- Amazon Earnings Miss: Amazon reported fourth-quarter earnings of $1.95 per share, falling short of the $1.97 consensus estimate, resulting in a 9% drop in shares, highlighting pressures in the competitive e-commerce landscape.
- Reddit Stock Surge: Reddit's stock rose 4% after its fourth-quarter earnings exceeded expectations, coupled with a $1 billion share buyback program, which is expected to boost investor confidence and enhance future shareholder returns.
- Molina Healthcare Loss: Molina Healthcare posted an adjusted loss of $2.75 per share, leading to a 33% decline in shares, primarily due to pressures from Medicaid premium adjustments and Medicare costs, with full-year revenue projected at $44.5 billion, below the $46.55 billion forecasted by analysts.
- Envista Strong Performance: Envista reported fourth-quarter earnings of 38 cents per share and revenue of $750.6 million, resulting in a 14% increase in shares, with expectations of 2% to 4% core sales growth in 2026, indicating robust performance in the dental products market.
See More
Roblox Shares Surge 16% Following Earnings Report: What’s Driving Investor Confidence?
- Roblox Revenue Growth: Roblox reported a significant increase in fourth-quarter revenue, indicating strong financial performance.
- Surge in User Engagement: The platform experienced a notable rise in bookings, daily average users, and hours engaged, all surpassing Wall Street expectations.
See More
Microsoft's Stock Downgraded: Reasons Why the Azure Creator May Struggle to Dominate in AI.
- Analyst Downgrade: Microsoft stock received a rare downgrade from an analyst.
- Optimistic Projections: The analyst believes that the company's revenue and earnings expectations are overly optimistic.
See More
Significant Stock Movements in Midday Trading
- McKesson Earnings Beat: McKesson's fiscal third-quarter earnings per share exceeded Wall Street's highest estimates, and the adjusted full-year EPS guidance was raised above analyst consensus, leading to a 16% stock price increase, indicating strong performance in the medical supply sector.
- Bob's Discount Furniture IPO: Bob's Discount Furniture debuted on the New York Stock Exchange with shares priced at $17, recently rising 10%, marking a successful entry into the public market and laying the groundwork for future growth.
- Fluence Energy Earnings Miss: Fluence Energy reported first-quarter revenue of $475.2 million, falling short of the $481.2 million consensus, with a per-share loss of 34 cents missing the 21-cent loss estimate, resulting in a 31% stock price drop, reflecting market concerns over its profitability.
- Cardinal Health Guidance Raised: Cardinal Health reported quarterly adjusted earnings of $2.63 per share, exceeding the $2.36 consensus, with revenue of $65.63 billion surpassing the $64.14 billion estimate, leading to an 8% stock price increase, showcasing strong growth potential in the healthcare services sector.
See More
Tech Struggled in Earnings Season, But Other Stocks Are Providing Relief.
Technology Stocks Struggle: Technology stocks have experienced a challenging earnings season, indicating potential issues within the sector.
Other Sectors Performing Well: Despite the struggles in technology, most other sectors are showing resilience, which is a positive indicator for investors.
See More
Analysts Assign Buy Rating to Alphabet
- Rating Upgrade: Analysts have assigned a buy rating to Alphabet (GOOGL), indicating strong market confidence in the company's future performance and suggesting it will continue its growth trajectory.
- Price Target Analysis: The average price target for Alphabet is set at $369.30, reflecting market recognition of its potential value, which may attract more investor interest.
- Market Reaction Expectations: Following the buy rating announcement, Alphabet's stock price is expected to experience positive momentum, potentially drawing in more capital and enhancing its market performance.
- Long-Term Growth Potential: The analysts' rating and price target suggest that Alphabet's ongoing innovations in technology and advertising will support its future profitability, strengthening its position in a highly competitive market.
See More
Amazon's Earnings Miss Expectations, Shares Drop
- Amazon Earnings Miss: Amazon reported fourth-quarter earnings of $1.95 per share, falling short of the $1.97 consensus estimate, resulting in a 9% drop in shares, highlighting pressures in the competitive e-commerce landscape.
- Reddit Stock Surge: Reddit's stock rose 4% after its fourth-quarter earnings exceeded expectations, coupled with a $1 billion share buyback program, which is expected to boost investor confidence and enhance future shareholder returns.
- Molina Healthcare Loss: Molina Healthcare posted an adjusted loss of $2.75 per share, leading to a 33% decline in shares, primarily due to pressures from Medicaid premium adjustments and Medicare costs, with full-year revenue projected at $44.5 billion, below the $46.55 billion forecasted by analysts.
- Envista Strong Performance: Envista reported fourth-quarter earnings of 38 cents per share and revenue of $750.6 million, resulting in a 14% increase in shares, with expectations of 2% to 4% core sales growth in 2026, indicating robust performance in the dental products market.
See More
Roblox Shares Surge 16% Following Earnings Report: What’s Driving Investor Confidence?
- Roblox Revenue Growth: Roblox reported a significant increase in fourth-quarter revenue, indicating strong financial performance.
- Surge in User Engagement: The platform experienced a notable rise in bookings, daily average users, and hours engaged, all surpassing Wall Street expectations.
See More
Microsoft's Stock Downgraded: Reasons Why the Azure Creator May Struggle to Dominate in AI.
- Analyst Downgrade: Microsoft stock received a rare downgrade from an analyst.
- Optimistic Projections: The analyst believes that the company's revenue and earnings expectations are overly optimistic.
See More
Significant Stock Movements in Midday Trading
- McKesson Earnings Beat: McKesson's fiscal third-quarter earnings per share exceeded Wall Street's highest estimates, and the adjusted full-year EPS guidance was raised above analyst consensus, leading to a 16% stock price increase, indicating strong performance in the medical supply sector.
- Bob's Discount Furniture IPO: Bob's Discount Furniture debuted on the New York Stock Exchange with shares priced at $17, recently rising 10%, marking a successful entry into the public market and laying the groundwork for future growth.
- Fluence Energy Earnings Miss: Fluence Energy reported first-quarter revenue of $475.2 million, falling short of the $481.2 million consensus, with a per-share loss of 34 cents missing the 21-cent loss estimate, resulting in a 31% stock price drop, reflecting market concerns over its profitability.
- Cardinal Health Guidance Raised: Cardinal Health reported quarterly adjusted earnings of $2.63 per share, exceeding the $2.36 consensus, with revenue of $65.63 billion surpassing the $64.14 billion estimate, leading to an 8% stock price increase, showcasing strong growth potential in the healthcare services sector.
See More
