Mcdonald's And Morgan Stanley Are Among AI Favorable Stocks, Ubs Says 

Following a last-minute debt-ceiling deal reached by lawmakers over the holiday weekend, the S&P 500 is expected to reach a fresh 10-month high on Tuesday, reflecting Wall Street's positive response. However, the market's focus is set to swiftly shift towards the upcoming jobs report on Friday. Driving the market gains once again is the technology sector, with Nvidia, the AI chip leader, experiencing a surge in its stock price after announcing a range of new products.

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UBS, aligning with this trend, has identified numerous stocks that are favorably positioned to benefit from the rapidly evolving technology landscape. The UBS team, led by analyst Michael Briest, emphasizes the potential of generative AI (artificial intelligence capable of creating text, video, etc.) to intensify competitive pressures. Among the 32 teams at UBS, 18 anticipate this outcome, with 19 foreseeing the potential for higher revenues. Furthermore, nearly all sectors, except for the Internet sector, see opportunities for cost reduction.

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For instance, restaurants like McDonald's can further benefit from automated ordering systems and demand-based food preparation, while AI can enable retailers such as Walmart to gain deeper insights into consumer preferences. The adoption of AI will also contribute to cost reductions in the automobile industry, particularly in distribution, maintenance, and spare parts. 

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Aerospace and defense sectors will experience reduced costs in materials and labor, along with enhanced safety and security measures. UBS highlights Morgan Stanley's utilization of AI, particularly through a pilot scheme for ChatGPT, to summarize research and generate data for financial advisors.

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While lower labor costs are a prevalent theme across most sectors, not all sectors will see increased competitive advantages. The software sector, for example, may face heightened competition as AI technology continues to advance and expand.

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