How should investors position for further equity gains, according to UBS?

What happened: UBS said it believes the equity rally can continue, but urged investors to diversify after last week's sharp sell-off in U.S. technology stocks led by AI-related assets and semiconductors. Key numbers: Nasdaq decline last week led by AI and semis. Why it matters: UBS does not believe the sell-off undermines the structural AI story, citing resilient economic activity, broadening earnings growth and robust AI investment. It limits neocloud exposure, prefers well-funded hyperscalers and favors financials and industrials in Europe.

UBS said it believes the equity rally can continue, but urged investors to diversify after last week's sharp sell-off in U.S. technology stocks led by AI-related assets and semiconductors.

UBS does not believe the sell-off undermines the structural AI story, citing resilient economic activity, broadening earnings growth and robust AI investment. It limits neocloud exposure, prefers well-funded hyperscalers and favors financials and industrials in Europe.