In the Wake of the Iran War, Emerging Economies are Creating Demand for New Investment Opportunities Underpinned by Tech Innovation

It’s not breaking news that stocks, bonds and commodities have all been gripped by volatility this past month, with assets seeing wild swings as the U.S.-Iran war has dragged on. The conflict has impacted businesses small and large, with Oracle's (ORCL) office in Dubai reportedly struck by a missile this weekend.

Most notably, the war has triggered a severe energy price shock, which has heavily impacted emerging markets. When it comes to global market volatility, the impact across the globe has disproportionally impacted certain markets.  

While some regions, such as Europe, have more of a buffer to absorb the higher price of oil, emerging markets have not had this same advantage. This means sustained higher oil prices can broaden into other costs, while weighing on economic activity in other areas. For instance in Southeast Asia, many offices have moved to a four-day work week in order to limit energy use, according to Al Jazeera. 

Rising oil prices, supply chain disruptions and inflationary pressures have caused significant stock declines in these markets, with the MSCI Emerging Markets Index facing its steepest drop since March of 2020. 

With challenges in these markets, we’re also beginning to see new opportunities appear as many countries realize they have been overly dependent on certain areas, and need to better diversity. 

Below is a look at how the top-down effects of the Iran war for emerging markets has created new demand, and four associated investment opportunities these changes present.  

The Critical Need for Alternative Energy Sources 
 

The most clear and immediate impact of the Iran war is the price of oil and the energy market in general. Since the conflict first began and the price per barrel soared day by day, markets around the world began to brace for the inflationary shock that was to follow. 

Higher energy and commodity costs are driving inflation across developing nations and straining local economies. Although the process of divesting from fossil fuels has been a global goal for decades, progress has been slow and fragmented. However, events such as the Iran war put the economic cost of an over-reliance on imported oil into sharp focus. Whether it's due to cost-related factors or a sustainability drive, there has been a sharp uptick in solar adoption across emerging markets and the global south over the past few years. Over the past five years, solar and wind generation in the Global South has grown on average at 23% annually. 

In 2025, emerging markets took advantage of less expensive solar panels imported from China to shift away from costlier or less reliable sources of power. In Pakistan, farms and factories installed rooftop panels to cope with rising energy costs. Meanwhile, solar has risen from almost nothing in 2019 to roughly 10% of South Africa’s electricity-generating capacity.

The sobering reality of the Iran war means that demand for alternative energy is likely to increase further, presenting a potential investment opportunity. Here, high-tech companies in the sustainability space are helping to make the transition to renewables more efficient and targeted. 

For instance, tech enterprise Planno.ai uses geospatial AI technology, which taps into satellite data, imagery and machine learning models, to detect viable rooftops. The findings are augmented with estimates of potential new sources of energy. In a recent interview, CEO Daniel Domingues explained, “It offers an alternative to manual processes, as well as a platform where opportunities can be organized, managed, and shared across the development team.”

“So far, we found the strongest traction in the Middle East, where our team is based, and South Africa, but we expect European adoption to grow significantly in 2026 as we open more markets,” he added. 

While switching to solar and other renewable energy sources will meet a percentage of the emerging markets electricity requirements, the global supply chain is still highly dependent on oil. 

Diversification of energy sources is one solution, but another effective strategy focuses on boosting efficiency and reducing waste across the supply chain and within large organizations. Credibl ESG, which recently announced a new partnership with SD Worx, is an AI-powered sustainability and ESG data management software and reporting platform.

Aside from helping to reduce carbon emissions through efficient operational management, the presence of platforms like Credibl signals a mark of trust for ESG-focused investment funds that seek reliable, stable companies in EMs. 

With this rise in demand, publicly traded company First Solar (FSLR) is one other company to watch, in addition to privately held Raya Power, which is looking to make solar energy accessible to everyone.  

Fintechs Tackle Currency Volatility 

The war in Iran has sparked chaos across financial markets, leaving some investors and market makers reluctant to take on risk. This can, unfortunately, disproportionately impact emerging markets. 

None of the world's ​biggest markets, from U.S. Treasuries to gold, have been spared. Even safe-haven currencies like the Swiss Franc, the yen, and the USD are offering less stable yields. 

However, as investors look to reduce risks across their portfolios and assets, it's more likely they will draw back from currencies in emerging markets for safer bets elsewhere. The knock-on effect is more volatile local pricing and instability. 

In order to avoid the shocks of currency fluctuations, we expect to see more people turn to fintech innovations, in particular those that handle international transactions. Midi, for example, helps U.S. companies pay remote workers in Latin America and offers a much more robust option than outdated cross-border payments that can fluctuate significantly. 

To ensure stability and compliance, MiDI based its financial infrastructure on the United States regulatory system, in alliance with Banco San Juan International and other banking partners.

For fintech solutions and further growth into these emerging markets, expect to see Silicon Valley funds with international presence play an important role here. For instance, LG NOVA, the innovation and venture arm of LG Electronics, and Aurion Capital, led by Ali Diallo, are both working to deepen cross-border collaborations and build a more interconnected innovation ecosystem across Asia, the Gulf Cooperation Council (GCC), and the U.S. 

Supply Chain Disruption Puts Agricultural Yield at Risk 

Following the closure of the Strait of Hormuz, the focus has been on how this will affect the global flow of petroleum and cause the price per barrel to soar. 

However, it also means that global supply chains for fertilizer and logistics have also effectively ground to a halt.  All five major container lines have suspended Hormuz transits, and the cascading delays will hit supply chains far beyond the Middle East, including those companies with no direct Gulf exposure.

Developing economies that are highly reliant on agriculture are more exposed to this risk. 

New ventures such as Wingsure, which was spun out from SRI International (formerly the Stanford Research Institute), are helping by leveraging AI to provide tools and training for farming in addition to other areas, yet support is still needed.

These challenges also present an opportunity for software companies in the logistics space. Transmetrics leverages AI to unify load sources, evaluate profitability, and maximize truck utilization. While this won’t solve the Strait of Hormuz blockade, data-powered innovations like this will help to find immediate, efficient solutions for the distribution of goods along the supply chain. 

Finally, the situation shows how exposed our global food supply chain is to shocks. International think tanks such as Horasis, led by Frank-Jurgen Richter, that promote more cooperation are going to be key to reducing these risks for global markets in the future. 

Publicly traded companies to watch include Adecoagro S.A. (AGRO) and BrasilAgro (LND), which focus on large-scale farmland operation and commodity production.

Rising Costs Increase Demand for Nearshoring Opportunities

While emerging markets may experience some of the most drastic shocks due to the Iran war, this doesn’t mean that leading economies are immune. 

Costs are rising worldwide, causing many organizations to explore cost-saving measures to weather the storm. 

Unbeknownst to some, major tech companies like Amazon and Google have been building out nearshoring operations in Latin America for more than a decade. Not only is it easier for North American businesses to collaborate with tech teams in Central and South America due to close time zones, similar cultures, and strong levels of English proficiency, the region has also become a powerhouse for software engineering and AI innovation in recent years. 

This is the case of Making Sense, an innovation-driven technology company focused on software development, user experience, digital transformation, and AI. Their CEO and Co-founder Cesar DOnofrio states, “Our company has clients in the U.S., but 90% of our workforce is located in Latin America, and a great portion of it is based in Argentina, where I was born. I feel proud that these developers can succeed in such a competitive market.”

However, when it comes to near-shoring, most mid-market U.S. tech companies haven’t yet followed suit. As the Iran war drives up costs, we expect to see a new wave of interest in Latin America software engineering partners from this segment.

This points to another potential investment opportunity on the horizon, part of which has been fueled by the presence of multinational development companies that were ahead of the trend and have been working to build efficient software engineering talent pipelines to cater to this demand. 

In October of 2025, Ness Digital Engineering opened a new Center of Excellence for AI-driven Intelligent Engineering in Guadalajara, Mexico, to establish a long-term engineering base in Latin America, underscoring a growing shift in how enterprises are reimagining agile product development and innovation.

U.S. software development company Source Meridian, founded by Mike Hoey, has also been expanding its footprint in South America, with offices already established in Colombia and Ecuador. 

We also expect to see more U.S. companies turn to AI to lower costs. One way this can be achieved is by bootstrapping the team with the help of Agentic AI - something the founder of MyUser, Ibrahim Hasanov, has been using to scale his company.

Other examples of leveraging AI can be found with Prezent, which remains a remote-first company to harness the best global talent for its intelligent AI presentation software, ADvendio, which recently launched new technology designed to help reclaim the 28% of the workday currently lost to manual human middleware tasks, and IvySchool.ai, which is empowering the next generation with AI, coding, and entrepreneurship skills, and recently announced a partnership with Delhi Public School (DPS).