Analysts Target Five Non-AI Stocks for Summer Upside

The S&P 500 gained 9.6% in the first half of 2026 and nearly 15% in the second quarter, with much of the rally concentrated in a small group of AI-related large-cap stocks. As money rotated out of those crowded trades and markets faced geopolitical shocks, including the Iran conflict, several Wall Street analysts highlighted five companies they say warrant closer attention this summer: Yum Brands, Lockheed Martin, McDonald’s, Under Armour and Toast.

UBS placed Yum Brands on a list of preferred low-volatility stocks, noting the owner of Taco Bell, KFC and Habit Burger has produced cash-flow returns on investment above 30% for most of the past decade. UBS forecasted Yum’s cash-return measure will reach a record high by 2027 after management completes the planned divestiture of Pizza Hut. The bank flagged Taco Bell’s international expansion and a planned KFC loyalty program as potential revenue drivers. Yum shares have risen more than 10% this year and recently hit 52-week highs.

UBS kept a neutral rating on Lockheed Martin but projected the aerospace and defense company could exceed second-quarter expectations and lift guidance. The bank pointed to a seven-year, $35 billion award linked to the Terminal High Altitude Area Defense interceptor program and rising demand for missile systems, particularly in Lockheed’s Missiles and Fire Control division. Most analysts maintain hold ratings on the stock, while consensus price targets suggest upside from current levels.

McDonald’s shares have fallen about 8% year-to-date. UBS described the fast-food chain as a defensive earnings option, citing global scale, brand strength and initiatives aimed at boosting U.S. same-store sales and regaining market share. Most analysts retain bullish ratings on McDonald’s, and consensus targets imply roughly 17% upside over the next 12 months.

Under Armour was identified by UBS as a high-conviction retail pick after a technical screening. The athletic-apparel maker is up about 22% this year. UBS said investors may be underestimating the brand’s value and management’s ability to improve execution after a quarter that previously pressured the shares.

Goldman Sachs upgraded restaurant-software provider Toast to Buy from Neutral, saying a recent selloff created an entry point. Toast’s stock is down roughly 20% this year amid concerns about higher hardware costs and stronger competition. Goldman highlighted Toast’s AI-powered marketing product, Toast IQ Grow, as a driver of higher software revenue per customer and noted plans to expand into retail, enterprise and international markets. The bank raised its price target to $36, implying about 26% upside from current levels.

Analysts noted the common feature among these five names is their position outside the crowded AI trades and the presence of company-level catalysts such as resilient cash flows, large defense contracts, loyalty programs and new software products. Analysts wrote these attributes are reasons to monitor the stocks as market attention shifts away from a narrow set of large-cap AI leaders.