UBS is urging investors to diversify beyond US technology stocks as concentration risk in artificial intelligence winners grows. The Swiss bank said the S&P 500 should deliver further gains by year-end but warned that portfolios are dangerously concentrated in a handful of AI names. UBS sees opportunities in European equities, where Stoxx Europe 600 companies are on track for their strongest second-quarter profit growth in four years, and in Japanese equities, where second-quarter operating profits are growing more than 20% year on year. The bank also forecasts Asia-Pacific earnings growth of 72% this year and 20% next, driven by the region's AI hardware supply chain, and has upgraded India to attractive. Nearly 40% of self-directed investors on UBS's platform hold more than half their money in 10 stocks or fewer, making diversification across regions and sectors essential.
UBS Group AGUBS's own advice to diversify and its positive outlook on non-US markets may attract clients and bolster its investment banking and wealth management business.
