What to buy now with the market at all-time highs, according to UBS

Broadcom Year-to-Date Growth

22%

Percentage increase in Broadcom's stock value this year.

Accenture Year-to-Date Decline

34%

Percentage decrease in Accenture's stock value this year.

Accenture CFROI Forecast

43.7%

Projected cash flow return on investment for Accenture.

§ 01 Executive Snapshot

What: UBS identifies buying opportunities in stocks despite market all-time highs.
Who: UBS, Broadcom, Accenture, Nvidia, Micron Technology, Palantir Technologies, Reddit, Microsoft, Adobe, Take-Two Interactive, Salesforce.
Why it matters: Investors can leverage identified categories of stocks to capitalize on improving fundamentals and valuation discrepancies.

UBS suggests two baskets for investors: stocks with inflecting fundamentals and quality laggards.
Broadcom (AVGO) is up 22% this year, with a forecast CFROI of 77.1% and expected to exceed 80% in 2027.
Accenture (ACN) has seen a 34% decline this year, with a CFROI forecast of 43.7%.

The market is experiencing a technology-driven rally, with the S&P 500 and Nasdaq Composite reaching new highs, influenced by strong earnings and easing geopolitical tensions.
UBS's analysis reflects a broader trend of identifying investment opportunities in high-quality stocks that are undervalued despite recent market performance.

Immediate market consequence: Investors may shift focus to identified stocks, potentially impacting their prices and overall market dynamics.
Long-term operational implication: A sustained focus on CFROI and valuation metrics could change how investors assess quality stocks in the tech sector.

Potential risk: Investor concerns over disintermediation and margin pressure due to emerging AI models could affect stock performance.
Potential risk: Market volatility and geopolitical tensions could impact investor sentiment and stock valuations despite strong fundamentals.

Upcoming earnings reports for the highlighted companies could provide insights into the effectiveness of UBS's investment strategies.
Observing market reactions to geopolitical developments will signal the potential sustainability of current market highs.

§ 07

What stocks does UBS recommend for investors?

UBS recommends stocks with inflecting fundamentals and quality laggards, including Broadcom, Accenture, Nvidia, and Micron Technology.

Why is the market currently at all-time highs?

The market is experiencing a technology-driven rally influenced by strong earnings and easing geopolitical tensions.

How might investor focus shift according to UBS's analysis?

Investors may shift their focus to identified stocks, potentially impacting their prices and overall market dynamics.