UBS names 40 buy-rated stocks to diversify away from AI trade

According to CNBC, UBS compiled a list of 40 buy-rated stocks this week that it says can provide diversification away from the artificial intelligence trade, while investors also seek alternatives to the boom-driven volatility in AI-linked names. Westwood Capital Managing Partner Dan Alpert said he has been buying cheap portfolio protection and noted that the 2-year Treasury looks inexpensive as a defensive bet. The Global X Data Center and Digital Infrastructure ETF (DTCR) is down more than 10% from a month ago, the PHLX Semiconductor index (SOX) is down around 12%, and the Roundhill memory ETF (DRAM) has lost nearly 20%. UBS analyst Joseph Parkhill said many high-quality companies with defensive traits have fallen out of favor even though fundamentals have remained resilient, resulting in lower valuations. The firms highlighted by UBS include McDonald's, PepsiCo, Charles Schwab, S&P Global, Thomson Reuters and SS&C Technologies. Thomson Reuters is up more than 20% over the past month, while SS&C Technologies is up close to 3%.