Investment giant reveals: the stocks you should buy now

A new review by the investment firm UBS, published on Wednesday, analyzes the key trends shaping capital markets and explains the factors that led the world's leading stock indices to new highs.

According to UBS, the S&P 500 index recorded a 1.8% increase and closed at a record level of 7,737 points. The European STOXX 600 index also reached a new high after a 0.7% rise, while the Nasdaq index strengthened by 2.6% and the SOX semiconductor index jumped by 6.6%.

One of the key factors pointed out by UBS is the improvement in the geopolitical atmosphere and the decline in energy prices. According to the review, diplomatic developments and the hope for the reopening of the Strait of Hormuz contributed to a decline in the price of Brent crude oil, which reached a level of 78.5 dollars per barrel. This decline reduces the fear of inflationary pressures stemming from energy costs.

In addition, the company addresses the impact of artificial intelligence on the global economy. According to UBS, company reports continue to show that investments in the AI field are starting to generate value, but investors are becoming more cautious and are examining which companies are truly succeeding in translating the technology into revenue. For example, Palantir has improved its revenue forecasts, while Caterpillar is benefiting from increased demand for construction equipment and power generation following the establishment of new data centers.

The US economy also continues to show strength. The purchasing managers' index in the manufacturing sector rose in July to 55.6 points, a figure indicating an expansion of activity. At the same time, the US central bank continues its cautious policy and left the interest rate unchanged, while examining the continued decline in inflation.

Regarding investment strategy, UBS recommends that investors avoid over-concentration in a limited number of stocks and build a more diversified portfolio. In addition, the company recommends gaining exposure to the entire value chain of the artificial intelligence field and including high-quality short- and medium-term bonds in portfolios.

UBS further notes that the gains in the markets are no longer relying only on large technology companies. About 80% of the companies in the S&P 500 index managed to beat profit forecasts, compared to a historical average of about 73%. At the same time, the company identifies an improvement in European momentum and expects a growth of about 25% in European corporate profits in the years 2026 and 2027, which led it to upgrade the rating of European stocks.