House View Monthly Letter

UBS maintains an attractive view on equities driven by a robust corporate earnings outlook and AI adoption, while advising diversification beyond tech megacaps. Despite rising bond yields and geopolitical oil risks, the firm favors quality fixed income and commodities as portfolio hedges.

Key Takeaways

• 1.Equity markets are expected to move higher supported by a strong earnings boom, particularly within the AI value chain.
• 2.Diversification beyond megacap stocks is recommended to mitigate concentration risk and capture broader AI-related growth.
• 3.Oil supply disruptions in the Strait of Hormuz represent a significant macro risk, though price impacts have been somewhat mitigated by buffers.

Table of Contents

• Stirred, not shaken?
• The surge in earnings
• Oil prices
• Bond yields
• Investment ideas
• Disclaimer / Risk Information

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