European equities' artificial intelligence-focused rally could broaden into industrial and luxury stocks, UBS analysts write. Re-shoring of industrial capability, government support and brightening economic conditions will all help a wider pool of European stocks perform, the analysts write. European industrials trade at a discount to U.S. peers, but momentum from electrification and AI data center build out will help the sector. Moreover, stabilizing demand for luxuries should help the sector rebound, they say. German fiscal spending will also help the country's stocks, they add. "While we remain neutral on European equities overall, the case for selective exposure remains strong." The Europe-wide Stoxx 600 trades up 0.5% at 642.69 points, on track to close at a record high. (josephmichael.stonor@wsj.com)