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Investing.com - Artificial intelligence, power and resource innovation and longevity are the three of the major factors that could underpin stock markets in the coming decade, according to analysts at UBS.
In a note to clients, the brokerage said these are the "key thematic opportunities" for equity investors, "both structurally over the long run and tactically in the near term."
With these trends in mind, UBS highlighted a number of firms in their global equity focus list. Here’s a look at some of the names across a range of sectors that UBS spotlighted.
ASML (AS:ASML): The leading supplier of lithography equipment used in manufacturing semiconductor devices, the company has progressively gained market share since it was spun off from Philips and ASMI in 1984. Its products have now become key components in the global supply of chips.
"Given its strong visibility, we view both ASML’s medium-term [2025] and long-term [2030] targets as plausible, and they imply quite an attractive valuation for such a defensive business. However, we note that the revenue recovery may be uneven; therefore, investors should stay attentive to this risk," the UBS analysts said.
Shell (AS:SHEL): One of the five global super-major oil and gas companies, Shell is bolstered by a sizeable liquefied natural gas portfolio and a sizeable network of over 45,000 global gas stations.
This sizeable retail business gives Shell "strong insights" into the end consumer and "supports its position" in the ongoing energy transition, UBS said.
"The strategy to simplify and focus on returns while delivering per-share growth -- as the share count shrinks -- should benefit shareholders. Persistently low energy commodity prices, as well as exploration failure or expropriation and taxation changes are among other key risks for all oil and gas companies, including Shell," the analysts said.
Hermès (EPA:HRMS): The French brand known for its high-end leather goods and iconic handbags sold at top price points, the firm has some of the strongest margins among the luxury sector.
In times of economic turbulence, Hermès’s pricey items like Keely and Birkin bags have also granted it greater resilience than its peers, the UBS analysts argued.
Still, a global slowdown in growth and discretionary spending is still a potential headwind for the business, along with a possible jump in raw material costs or disruptions caused by sweeping U.S. tariffs, the UBS strategists flagged.
Banco Santander (BME:SAN): The Spain-based lender has operations that extend from Europe into Central and South America, which the UBS analysts argue help the bank generate stable growth.
Its Brazilian unit, which accounts for more than 25% of group-wide earnings, has likely reached a net interest margin inflection point, the brokerage said, adding that this should aid Santander’s earnings.
But risks remain from broader economic uncertainty, unexpected changes in interest rates and developments in emerging markets, they warned.
Sunrise Communications (NASDAQ:SNRE): The number two player in the Swiss telecoms market with roughly 30% market share in the mobile, broadband and television segments, Sunrise is the latest addition to UBS’s "top picks."
Following a carve out by telecom company Liberty Global (NASDAQ:LBTYA), Sunrise started trading as a standalong entity on the Swiss stock exchange on November 15.
Although the group’s high amortizations and depreciations have fallen only gradually and led to a net loss in 2024, these trends are "not cash-relevant and thus do not cause us concern," the analysts said.
"We expect Sunrise to see stable to low revenue growth over the coming years, with small market share gains," they predicted.