In a fast-changing world, certain powerful forces are reshaping the global economy, society, and the way we live – these are known as megatrends.
Megatrends span areas like technology, ageing population, climate, and geopolitics. They unfold over years or even decades, creating long-term shifts that investors can't afford to ignore.
While they can be easy to overlook, companies aligned with these trends can find themselves in a strong position for sustained growth.
For retail investors, understanding megatrends offers a valuable lens through which to spot opportunities early – and invest with greater conviction.
Here are three major megatrends currently gaining momentum, and a stock pick for each that could benefit from riding these powerful waves of change.
This article isn’t personal advice. If you’re not sure an investment is right for you, seek advice. Investments and any income from them will rise and fall in value, so you could get back less than you invest. Ratios also shouldn’t be looked at on their own.
Investing in an individual company isn’t right for everyone because if that company fails, you could lose your whole investment. If you cannot afford this, investing in a single company might not be right for you. You should make sure you understand the companies you’re investing in and their specific risks. You should also make sure any shares you own are part of a diversified portfolio.
GSK
The world’s ageing population is placing growing demands on healthcare providers as senior citizens seek to maintain a good quality of life into their later years. Some of GSK’s highest-profile vaccines target older age groups.
Vaccine sales in the US had previously been held back by regulatory headwinds blowing against Arexvy for the flu-like virus RSV, and a plateau in demand for the shingles vaccine, Shingrix.
Encouragingly, vaccine sales have started to recover, with the potential for higher growth rates in the second half of 2025 as easier comparisons come into play. And while there’s no guarantee of further commercial success, we see some strong growth drivers ahead.
Arexvy addresses a £5bn market opportunity, and recently had its US recommendation extended to the 50-59 age group.
For Shingrix, there’s still plenty of growth to go for outside of the US. And if ongoing research can prove a link between Shingles and reduced dementia risk, there could be further upside.
However, there’s no assurance this will materialise, and the results of the research aren’t expected for another four years.
GSK has plenty of other strings to its bow too.
In respiratory diseases, it has its sights set on improving outcomes for sufferers of COPD (Chronic Obstructive Pulmonary Disease), the third leading cause of death worldwide.
Meanwhile, cancer treatment, although relatively small in terms of current sales, is growing rapidly. Recent approvals and launches in new markets mean there are strong growth drivers for the existing portfolio.
The development pipeline also looks promising, with plans for 14 product launches over the next six years, each with a peak annual sales potential of over £2bn. There are no guarantees, but we think there could be some upside to the group’s 2031 revenue target of £40bn (2024: £31.4bn).
Lately, uncertainty over tariffs and drug pricing has damaged investor sentiment towards the sector. However, GSK’s valuation looks less demanding than its peers, and if it can successfully execute on its growth opportunities, it has the potential to narrow this gap.
But, until clarity emerges on key policies weighing on the pharmaceutical industry, investors need to be ready for ups and downs.
Oracle Corporation
As far as megatrends go, few people would argue that tech will become an even more integral part of our lives over the next decade. One company we think could be well placed to benefit in the future is Oracle Corporation.
Oracle is best known for its database software, which helps businesses store and manage their data securely. But it’s also becoming a formidable force in the cloud-computing space thanks to its strong offering and surging demand from artificial intelligence (AI) companies.
What sets Oracle apart is how smoothly it connects its powerful data storage with flexible cloud services. This means businesses can keep their data securely in Oracle's databases and easily use it through Oracle’s cloud or other cloud providers – whichever suits their needs best.
On top of that, Oracle helps clients to securely train AI models using their own data. This lets businesses build unique AI solutions tailored to their own needs, giving them a strong advantage over competitors as they grow their AI capabilities.
With cloud infrastructure revenue jumping by 52% to $3bn last quarter, Oracle continues to grow much faster than its larger peers. It’s even pinching market share away from them. And the good news is that this work is high margin, meaning these rapidly growing revenues flow down into profits.
With demand for cloud infrastructure far outstripping supply, order backlogs exploded 41% higher to $138bn last quarter. That provides strong revenue visibility and is expected to more than double over the next year.
That said, there are challenges to be aware of.
Oracle currently commands only around 3% of the cloud infrastructure market, which remains dominated by Amazon, Microsoft and Google. We’re cautiously optimistic that it can keep gaining share, but it’s likely to be some time before it catches up to the major players.
The group’s net debt levels have also been rising, reflecting the heavy investment needed to meet the growing demand. The balance sheet looks manageable for now, but if growth doesn’t materialise as expected, then it could become more concerning.
National Grid
With a growing population and accelerating technological change, rising energy demand is a key long-term megatrend. Clean energy technologies like wind, solar, and nuclear are gaining traction – but picking winners in that space can be difficult.
Instead, we’re focusing on companies that remain essential no matter how the energy landscape evolves.
National Grid fits that bill.
It owns and operates critical electricity and gas infrastructure across the UK and north east US — the backbone of the energy system.
Energy grids are expensive to build and maintain, making them natural monopolies. Rather than duplicating infrastructure, governments allow one company to manage the system efficiently — and regulate them to protect consumers.
This setup allows National Grid to earn stable, inflation-linked returns, while spreading costs across a wide base of users.
Last year, that helped National Grid’s underlying operating profits rise by 12% to £5.4bn. As electrification accelerates globally, demand for robust grid infrastructure is only set to grow.
A roughly £60bn investment plan over the five years to March 2029 highlights the group’s intention to remain at the heart of the electric revolution. This will cover things like upgrading existing power lines, adding new ones, and improving resilience so it can handle higher energy loads.
The amount of money National Grid can charge consumers in the future is based on its asset base. So, while investing in good and reliable infrastructure might be costly now, it’s likely to reap rewards in the future.
We have no concerns about the health of the balance sheet, and this all points towards more focus on long-term growth rather than short-term returns, which we’re supportive of.
The regulatory environment can be a double-edged sword though, as regulators have the final say of National Grid’s profit potential.
If macroeconomic conditions worsen and consumers struggle to pay their bills, pressure will mount on regulators to slice into utilities’ profits.
National Grid’s valuation looks attractive, especially given its robust revenue streams. The sheer scale of the investment plans brings some execution risk, but should management pull it off, investors will likely be rewarded for their patience. As always though, nothing is guaranteed.
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