UBS strategists said that as AI-related spending increasingly translates into profits in the industrial, healthcare, utilities and financial sectors, the stock market rally driven by AI concepts has not subsided, but is spreading. Bhanu Baweja's team favors maintaining AI sector exposure while strengthening protection against macro risks that are underestimated by the market. They expect the S&P 500 index to rise to 8,100 points by the end of 2026, or about 6% from Monday's closing, and to 8,900 points in 2027; the European Stoxx 600 index is expected to rise to 690 points by the end of 2026, an increase of about 8%, and further rise to 760 points by the end of next year.

UBS strategists said that as AI-related spending increasingly translates into profits in the industrial, healthcare, utilities and financial sectors, the stock market rally driven by AI concepts has not subsided, but is spreading. Bhanu Baweja's team favors maintaining AI sector exposure while strengthening protection against macro risks that are underestimated by the market. They expect the S&P 500 index to rise to 8,100 points by the end of 2026, or about 6% from Monday's closing, and to 8,900 points in 2027; the European Stoxx 600 index is expected to rise to 690 points by the end of 2026, an increase of about 8%, and further rise to 760 points by the end of next year.