5 compelling investment ideas for a Stocks and Shares ISA in 2026

Stocks and Shares ISAs are brilliant long-term investment vehicles. With these accounts, we can invest up to £20,000 a year and not pay any tax on capital gains or income.

Of course, the challenge with these accounts is choosing investments. So I thought I’d put together some ideas to consider for 2026 and beyond.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

The defence theme

I like big investment themes (megatrends), and one of my favourite themes right now is defence. Today, countries are spending heavily on defence equipment in order to ensure they can protect themselves from geopolitical threats. And with NATO recently raising its defence spending target to 5% of GDP by 2035, this trend looks set to continue (although nothing’s guaranteed).

One product that could be worth considering here is the HANetf Future of Defence ETF (I hold). In terms of individual stocks, some names worth checking out include BAE Systems, Costain, and Concurrent Technologies.

Big Tech at a discount

I also like the technology sector. Today, we live in a tech-driven world and, realistically, we’re only going to see more digitalisation. In this space, I think a few of the ‘Magnificent 7’ stocks are worth a closer look at present. Because this cohort of shares has taken a hit recently.

Three that stand out to me are Amazon, Microsoft, and Nvidia (I hold all three). All face risks however, but I like the risk/reward set-up today as they all look cheap (Nvidia’s price-to-earnings (P/E) ratio’s now about 20).

Beaten-up growth stocks

Looking beyond the Magnificent 7, I’m seeing plenty of opportunities in the tech space further down the market-cap spectrum. Examples here include ServiceNow, Snowflake, Palo Alto Networks, and Palantir (I hold all of these except ServiceNow).

All of these stocks have recently taken a huge hit, but I continue to see a lot of growth potential in the long run.

Dividend shares

Of course, dividend shares are always a solid option for an ISA. These offer two potential sources of return – share price gains and dividend income. One stock I like here is M&G. It currently sports a dividend yield of about 7.8% (dividends are never guaranteed though).

UK small-caps

Finally, I think there are some really interesting opportunities in the UK small-cap space right now. An example here is British supplements powerhouse Applied Nutrition (LSE: APN). This company’s been growing at a prolific rate. For the six-month period to the end of January (its H1 FY2026) for example, revenue was up a whopping 57% year on year to £74.5m.

However, like a lot of companies, it’s seen its share price pull back recently. Note that a lot of the hit here came after the company said that the Middle East conflict was likely to cause disruption to shipping routes and potentially hit growth in the second half of its financial year (so there’s some near-term risk).

Taking a five-year view however (our preferred investment horizon here at The Motley Fool), I think this stock could do really well and is therefore worth a closer look. Trading on a P/E ratio of about 18 today, I see a lot of investment potential.

The post 5 compelling investment ideas for a Stocks and Shares ISA in 2026 appeared first on The Motley Fool UK.

More reading

• As the stock market goes crazy, here’s a FTSE 250 share I’m thinking about buying
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• 2 UK stocks to consider buying as Mounjaro and Wegovy take off
• 2 top growth stocks to consider for an ISA in April

Edward Sheldon has positions in Amazon, Microsoft, Nvidia, Palantir, Snowflake, Palo Alto Networks, and HANetf Future of Defence. The Motley Fool UK has recommended Amazon, BAE Systems, Concurrent Technologies Plc, M&g Plc, Microsoft, Nvidia, ServiceNow, and Snowflake. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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