UBS

UBS has raised its equity index targets across every major region after a stronger-than-expected results season, and now expects earnings at S&P 500 companies to grow 25% this year. That is up from a previous forecast of around 20%. The Swiss bank's chief investment office, which advises its global wealth management clients, has set a December 2026 target of 8,100 for the S&P 500 and 8,400 for June 2027. Its eurozone earnings growth forecast has been lifted to around 15%, from around 10%. Upgrades spread past the chip sector Semiconductors, technology hardware and energy account for the bulk of the revisions, according to strategist Matthew Carter. But the bank argues the improvement is wider than those three sectors. The median 2026 earnings estimate for S&P 500 constituents has risen since mid-May, and UBS expects every European sector to grow profits this year. Global equities have absorbed concerns about geopolitics, AI disruption and recent volatility in long-dated government bonds without derailing, the note said. AI still doing the heavy lifting Artificial intelligence remains the foundation of the bank's view. Demand for AI infrastructure continues to run ahead of supply on management's own account, which UBS reads as evidence that capital spending on AI will keep growing into 2027. Faster growth at cloud computing providers has also increased the bank's confidence that companies are earning an acceptable return on money already spent. UBS has upgraded Taiwanese equities and European information technology to attractive, its second-highest rating, citing renewed earnings momentum. It cautions that selectivity within AI matters more after such a strong run. Where else to look The bank wants investors to diversify their sources of return as profit growth spreads beyond the largest technology names. It points to industrials, financials, consumer discretionary and health care, alongside Europe, Japan, India, Asia excluding Japan, China and emerging markets more broadly. The recommendation is framed as a response to rising corporate investment, improving financial activity and resilient consumer spending. A hedge for the nervous For clients who share the direction of travel but not the risk appetite, UBS is pushing structured products. Capital preservation strategies, which cap losses at a set floor while retaining some participation in any rally, are presented as suitable for investors with concentrated portfolios or near-term liquidity needs. These can be adjusted by duration, by the size of the loss floor and by the participation rate. UBS notes that investors using such strategies still carry issuer, liquidity, barrier and cost risks.

UBS has dismissed fears of a stock market bubble, arguing that the global rally is built on surging corporate profits rather than the speculative frenzy that inflated share prices in the late 1990s. Burkhard Varnholt, a senior financial market adviser at the Swiss bank, said investors were being pulled in by what he called "fabulous earnings momentum" rather than a fear of missing out. The distinction matters, because earnings growth that outpaces revenue points to rising margins and productivity rather than to prices detached from underlying value. Profits, not prices, doing the work Varnholt pointed to profit growth of more than 20% a year in the eurozone, with expected earnings per share up 22% in the first half of 2026 alone. Across the MSCI All Country World ex-US index, forward earnings have jumped 36.9% this year and profit margins have reached a record 12.3%. South Korea has led the global performance ranking, up 85%, after its forward earnings roughly quadrupled. Two booms behind the rally The bank framed the surge as the product of two capital-intensive megatrends: the artificial intelligence boom and a sharp rise in security-related spending funded by government budgets. Together, UBS estimates, these investment booms amount to around 2.5% to 3.5% of global economic output, a scale it argues will sustain demand for years. Varnholt singled out energy as a striking example, noting that earnings in the S&P 500 energy index rose 55.2% this year even as its valuation multiple fell. He argued that only two factors matter for markets over the long run, corporate earnings and interest rates, with everything else amounting to background noise. A contrarian call on bonds On the second of those, UBS pushed back against warnings of a bond market shock from rising long-term yields. Varnholt contended that the deflationary force of innovation, now accelerated by AI, is widely underestimated as a check on inflation. He also argued that heavily indebted governments tend to suppress long-term rates through what economists call financial repression, rather than allowing yields to spiral. That case runs counter to the more cautious tone struck elsewhere in the market, where rising government bond yields have been flagged as the main threat to equity valuations. Setting the course at Jackson Hole The note coincided with the annual Jackson Hole gathering of central bankers, whose theme this year was innovation and payments. UBS said that meeting was quietly setting the direction of the financial system for the coming decade, from digital currencies to instant cross-border payments.

HSBC Holdings plc (NYSE:HSBC) posted a stronger-than-expected first-half profit this week and resumed its share buyback program. UBS Group AG (NYSE:UBS) posted its own profit beat, but it's facing a $125 million fine from U.S. regulators. Hedge funds had already been quietly trimming their UBS positions before that fine even became public. Europe's biggest banks are having a strong earnings season, but HSBC is telling the cleaner story of the two. Its profit beat came from wealth management growth, a resumed buyback, and a raised outlook for net interest income. On the other hand, UBS Group AG (NYSE:UBS) beat estimates too, but its win comes with a catch, i.e., a $125 million fine from U.S. regulators for repeated anti-money-laundering failures, alongside a hedge fund base that had already been quietly pulling back heading into the quarter. This makes you wonder: does a clean earnings beat matter more to investors than a resolved regulatory problem? Or does UBS's history as a "repeat offender" cast a longer shadow over its recovery than HSBC Holdings plc (NYSE:HSBC)’s cleaner quarter? First-half profit rose 23% to $19.5 billion, beating the $18.9 billion analysts expected. HSBC Holdings plc (NYSE:HSBC) resumed its buyback with a plan of up to $1 billion after pausing for three quarters to fund its Hang Seng Bank takeover. It also raised its guidance for net interest income to exceed $46 billion. Wealth revenue grew 18%. The bank added 640,000 new clients in the first half. Corporate and institutional banking is now HSBC's biggest income source, generating a third of first-half profit. The bank has more than 70 IPOs lined up across Asia. However, Citi flagged that the new $1 billion buyback came in well below the $2.2 billion investors expected, raising the question of whether HSBC is permanently scaling back its repurchases. The stock dropped from its own record high right after the earnings release. HSBC is also still exiting several businesses, including its Singapore insurance unit, Egypt retail banking, and Australian mortgages, which is a sign of ongoing restructuring rather than pure growth. Second-quarter net profit rose 17% to $2.8 billion, beating the $2.39 billion analysts expected, while pretax profit jumped 64% to $3.6 billion. UBS Group AG (NYSE:UBS) announced a new $3 billion buyback program. Its cost-to-income ratio improved to 72.9% from 80.5% a year earlier. Its Credit Suisse integration remains on track for completion by the end of 2026, with cumulative cost savings reaching $12.6 billion. CEO Sergio Ermotti said UBS is nearly back to the profitability it had before the Credit Suisse acquisition. However, UBS was fined $125 million by U.S. regulators just two days before this comparison, the largest-ever civil fine against a broker-dealer under the main U.S. anti-money-laundering law, and a repeat offense after a smaller 2018 penalty for similar failures. Zuercher Kantonalbank called the current share price simply "fair." UBS's buybacks also remain contingent on an unresolved Swiss capital rules debate that could force it to hold billions more in reserve capital. Insider Monkey's hedge fund database shows HSBC Holdings plc (NYSE:HSBC) had 18 hedge fund holders as of Q1 2026, down from 25 the quarter before. UBS Group AG (NYSE:UBS) had 37 holders, down from 39. So, hedge funds are bullish on UBS. Among other large European bank peers, Barclays had 36 holders, up from 29, and Deutsche Bank had 27, up from 24. Both banks are benefiting from higher interest rates, jumping markets, and growing wealth management. However, UBS recently got hit with a $125 million fine. This shows that taking over Credit Suisse is not just about money because UBS still has to clean up old legal problems. HSBC does not have this extra trouble weighing down its own recovery. Nonetheless, hedge funds prefer UBS Group AG (NYSE:UBS) over HSBC. While we acknowledge the potential of HSBC as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: Hedge Funds Are Bullish on DXC Technology (DXC) and Blackstone Inc. (BX)'s Profit Jumped 26% on AI Bets but the Stock Barely Moved. Here's Why. Disclosure: None. This article is originally published at Insider Monkey.

NEW YORK, August 21, 2026--(BUSINESS WIRE)--UBS Investment Bank today announced the coupon payment for the ETRACS Alerian MLP Index ETN Series B (NYSE Arca: "AMUB"), traded on the NYSE Arca. * The table above provides a hyperlink to the relevant prospectus and supplements thereto. For more information on the ETRACS ETN, see "List of ETNs." **"Current Yield (annualized)" equals the current Coupon Amount, multiplied by four (to annualize such coupon), divided by the Closing Indicative Value of the ETN on its current Coupon Valuation Date rounded to two decimal places for ease of analysis. The Current Yield is not indicative of future coupon payments, if any, on the ETN. You are not guaranteed any coupon or distribution amount under the ETN. About ETRACSETRACS ETNs are senior unsecured notes issued by UBS AG, are traded on either NYSE Arca or NASDAQ, and can be bought and sold through a broker or financial advisor. An investment in ETRACS ETNs is subject to a number of risks, including the risk of loss of some or all of the investor’s principal, and is subject to the creditworthiness of UBS AG. Investors are not guaranteed any coupon or distribution amount under the ETNs. We urge you to read the more detailed explanation of risks described under "Risk Factors" in the applicable prospectus supplement for the ETRACS ETN. UBS AG has filed a registration statement (including a prospectus and supplements thereto) with the Securities and Exchange Commission, or SEC, for the offerings of securities to which this communication relates. Before you invest, you should read the relevant prospectus, along with the applicable prospectus supplement and pricing supplements to understand fully the terms of the securities and other considerations that are important in making a decision about investing in the ETRACS ETNs. The applicable offering document for each ETRACS ETN may be obtained by clicking on the name of each ETRACS ETN identified above. You may also get these documents without cost by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, you can request the prospectus, the applicable prospectus supplement or pricing supplement, by calling toll-free (+1-877-387-2275). The securities related to the offerings are not deposit liabilities and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency of the United States, Switzerland or any other jurisdiction. About UBSUBS is a leading and truly global wealth manager and the leading universal bank in Switzerland. It also provides diversified asset management solutions and focused investment banking capabilities. UBS manages 7.3 trillion dollars of invested assets as per the second quarter 2026. UBS helps clients achieve their financial goals through personalized advice, solutions and products. Headquartered in Zurich, Switzerland, the firm is operating in more than 50 markets around the globe. UBS Group shares are listed on the SIX Swiss Exchange and the New York Stock Exchange (NYSE). In the US, securities underwriting, trading and brokerage activities and M&A advisor activities are provided by UBS Securities LLC, a registered broker/dealer that is a wholly owned subsidiary of UBS AG, a member of the New York Stock Exchange and other principal exchanges, and a member of SIPC (http://www.sipc.org/). UBS Financial Services Inc. is a registered broker/dealer and affiliate of UBS Securities LLC. This material is issued by UBS AG and/or any of its subsidiaries and/or any of its affiliates ("UBS"). This document was produced by and the opinions expressed are those of UBS as of the date of writing and are subject to change. It has been prepared solely for information purposes and for the use of the recipient. It does not constitute an offer or an invitation by or on behalf of UBS to any person to buy or sell any security. The information and analysis contained in this publication have been compiled or arrived at from sources believed to be reliable but UBS does not make any representation as to their accuracy or completeness and does not accept liability for any loss arising from the use hereof. Products and services mentioned in this material may not be available for residents of certain jurisdictions. Past performance is not necessarily indicative of future results. Please consult the restrictions relating to the product or service in question for further information. Alerian MLP Index and AMZ are trademarks of VettaFi and their use is granted under a license from VettaFi. VettaFi owns and administers the Alerian Index Series. UBS specifically prohibits the redistribution or reproduction of this communication in whole or in part without the prior written permission of UBS and UBS accepts no liability whatsoever for the actions of third parties in this respect. © UBS 2026. The key symbol, UBS and ETRACS are among the registered and unregistered trademarks of UBS. Other marks may be trademarks of their respective owners. All rights reserved. View source version on businesswire.com: https://www.businesswire.com/news/home/20260821562624/en/ Contacts Media Contact Alison [email protected] Institutional Investor contact1 +1-877-387-2275

Ross raised its full-year 2026 earnings guidance to between $8.61 and $8.77 per share. Citi called the quarter “outstanding” and said it sees further upside to 2026 earnings estimates. Barclays said Ross’ short-term execution advantage over competitors remains “wide.” Shares of Ross Stores (ROST) were in the spotlight on Friday, following positive Wall Street action after a blowout second quarter that included a 10% growth in comparable-store sales. At the time of writing, ROST shares were up 4%. See what 10M+ investors are talking about. Get the Stocktwits Daily Rip for what retail is watching right now, free to your inbox UBS expects Ross Stores to deliver an 8% compound annual growth rate (CAGR) in earnings over the next five years, supporting a roughly 27X price-to-earnings multiple. However, UBS cautioned that the stock’s current price already appears to reflect much of that optimism. UBS raised Ross’ price target to $239 from $232 and kept a ‘Neutral’ rating, according to The Fly. The stock is already trading above the updated target. Second-quarter (Q2) sales rose 13% to $6.3 billion, while comparable-store sales jumped 10%, the second consecutive double-digit quarter. Earnings came in at $2.66 per share. Both sales and earnings beat Wall Street’s estimates, according to Fiscal.ai data. Ross said customer traffic drove the comparable-sales increase, with the retailer attracting new and returning customers, and existing shoppers visiting more frequently and spending more. Home goods and cosmetics were the strongest categories. The company expects comparable sales to rise 6% to 7% in the third quarter and 4% to 5% in the fourth quarter. The retailer also raised its full-year 2026 earnings guidance to between $8.61 and $8.77 per share. Citi called the quarter “outstanding” and said it sees further upside to 2026 earnings estimates. Truist raised its price target on Ross to $310 from $290 and maintained a ‘Buy’ rating. The firm said trends remained strong across merchandise categories and customer demographics. Barclays lifted its target to $298 from $260, kept an ‘Overweight’ rating, and added that comparable-store sales growth topped the 7.6% consensus estimate. It added that Ross’ short-term execution advantage over competitors remains “wide.” Retail sentiment surrounding ROST on Stocktwits turned ‘extremely bullish’ from ‘bullish’ a day earlier, amid a 450% increase in message volumes. One user said if the stock breaks $250 and holds, it could see further surge. It is currently trading near $246. Another user sees the stock climb up to $280 if it breaks past $250. ROST stock has gained more than 27% so far this year. Also read: Tesla Issues Biggest Ever Recall In China – Here’s What The EV Maker Will Look To Fix For updates and corrections, email newsroom[at]stocktwits[dot]com. Arnab Paul has no position in any of the stocks mentioned in this article. StockTwits' news team content is for informational purposes only and is not intended as investment advice. For more, see our editorial policy. This article was originally published on StockTwits. Related: Apple Reportedly Shifts Focus To AI And Smart Glasses With Job Cuts In Siri And Vision Pro Teams FNMA Faces Senior Leadership Shake-Up — Fannie Mae Reportedly Cuts At Least 10 High-Ranking Jobs As Housing Market Risks Mount CAPR Stock Sinks As Investors Brace For Imminent FDA Call On Deramiocel