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The S&P 500 gained 9.6% in the first half of 2026 and nearly 15% in the second quarter alone, its strongest quarterly rally since 2020.
Yet beneath the headline gains, Wall Street is increasingly looking beyond the AI winners that powered much of the market’s advance.
As investors rotated out of crowded technology trades and navigated geopolitical shocks, including the Iran conflict, analysts began highlighting companies with resilient earnings, attractive valuations, and company-specific catalysts.
Recent research from Wall Street analysts suggests the second half of the year could reward a broader set of stocks than the market’s familiar leaders.
5 stocks to watch this summer
Here are five names analysts believe deserve a closer look this summer.
- Yum Brands (NYSE: YUM)
- Lockheed Martin (NYSE: LMT)
- McDonald’s (NYSE: MCD)
- Under Armour (NYSE: UAA)
- Toast (NYSE: TOST)
1. Yum Brands (NYSE: YUM)
UBS included Yum Brands among its preferred low-volatility stocks, arguing that investors have overlooked high-quality businesses as capital flooded into AI-driven names.
The bank describes the owner of Taco Bell, KFC, and Habit Burger as a stable business that has generated cash flow returns on investment (CFROI) above 30% for most of the past decade—a level few consumer companies consistently achieve.
UBS expects that profitability to improve even further. The firm forecasts Yum’s CFROI will reach a record high by 2027 as the company completes the divestiture of its Pizza Hut segment, allowing management to concentrate on higher-growth opportunities.
Analysts also see two operational catalysts supporting future growth: Taco Bell’s continued international expansion and the rollout of a KFC loyalty programme aimed at driving repeat customer spending.
Shares have already climbed more than 10% this year to fresh 52-week highs, but analysts remain constructive on the company’s ability to generate durable cash flows in an uncertain economic environment.
2. Lockheed Martin (NYSE: LMT)
Defense stocks haven’t attracted the same attention as artificial intelligence this year, but UBS believes Lockheed Martin could surprise investors over the coming months.
Although the firm maintains a neutral rating, it expects the aerospace giant’s second-quarter earnings to clear a relatively low bar, forecasting a “beat and raise” that could trigger a positive share price reaction.
Beyond quarterly earnings, UBS sees several longer-term catalysts. The biggest is a seven-year, $35 billion award tied to the Terminal High Altitude Area Defense (THAAD) interceptor programme, which could provide upside to 2026 financial expectations.
The bank also expects stronger growth from Lockheed’s Missiles and Fire Control division as global defence spending remains elevated and missile orders accelerate through the second half of the year.
Despite these tailwinds, Wall Street sentiment remains relatively cautious, with most analysts maintaining hold ratings.
Consensus price targets, however, still imply meaningful upside from current levels.
3. McDonald’s (NYSE: MCD)
McDonald’s has lagged the broader market in 2026, with shares falling nearly 8% even as the S&P 500 reached record highs.
UBS believes that underperformance has created an attractive opportunity for investors looking for stability rather than momentum.
The bank acknowledges near-term macroeconomic pressures and softer consumer trends but argues the fast-food giant remains exceptionally well positioned thanks to its global scale, strong brand, and defensive earnings profile.
UBS also sees several catalysts that could improve performance, including initiatives designed to strengthen US sales growth and capture additional market share.
In a market where investors are increasingly questioning stretched valuations elsewhere, McDonald’s offers a combination of earnings resilience and steady shareholder returns through dividends.
Wall Street broadly agrees with that assessment, with a majority of analysts maintaining bullish ratings and expecting meaningful upside over the next year.
Consensus analyst targets imply roughly 17% upside over the next 12 months.
4. Under Armour (NYSE: UAA)
UBS analyst Jay Sole screened for retailers with technical signals that have historically led to outperformance over short periods.
Under Armour emerged as one of UBS’s highest-conviction ideas.
The stock has already risen 22% this year despite broader weakness across athletic apparel retailers, and UBS believes the turnaround still has room to run.
While disappointing fourth-quarter earnings temporarily pressured the shares, Sole argues investors continue to underestimate the value of the Under Armour brand and management’s ability to extract stronger growth from it.
Rather than viewing the company as a mature apparel business, UBS sees a recognised global brand that has underperformed its potential in recent years and could continue surprising investors as execution improves.
5. Toast (NYSE: TOST)
Goldman Sachs upgraded Toast to Buy from Neutral, arguing the recent selloff has created an attractive entry point.
Shares have fallen about 20% this year as investors worried about higher hardware costs and tougher competition, but the bank believes the company’s fundamentals remain strong.
Goldman highlighted Toast’s new AI-powered marketing platform, Toast IQ Grow, as a potential driver of higher software revenue per customer, while expansion into retail, enterprise, and international markets should support further market share gains.
Goldman raised its price target to $36, implying 26% upside from current levels.
The bet away from AI
The common thread linking these five stocks is positioning away from crowded AI trades.
These stocks span restaurants, defense, consumer brands, and fintech, but they share one characteristic: analysts see catalysts the broader market may be overlooking.
Whether it’s resilient cash flows, operational improvements, or new growth initiatives, each offers a case for looking beyond the year’s biggest winners.
If market leadership broadens in the second half, the next outperformers may come from sectors that have quietly been waiting in the wings.
The post 5 overlooked stocks analysts like for this summer may be modified as updates unfold
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