This year's Champions League has become quite competitive. Bayern Munich and Manchester City have very strong squads. And they are consistently playing well. In addition, Arsenal, Real Madrid, Barcelona, Real Sociedad Atlético Madrid and Inter Milan have performed very well. The four La Liga teams Barcelona, Real Madrid, Atletico Madrid and Sociedad have played well and will surely qualify for the knockout rounds. City, Munich and Madrid are considered to be the favorites for this year's title. However the road to qualifying for the Champions League final will not be easy for them.
In general, Real Madrid, Bayern Munchen, Manchester City and Inter Milan are at the top of the list as favorite clubs in the 2023-2024 edition of the Champions League. I am quite sure that two of the four clubs above will advance to the final round. Looking at the depth of the squad and the attributes they have, Arsenal and PSG actually have the same thing but both have not reached their best point in the last decade. Apart from that, I also agree with you regarding several clubs that are playing well at the moment, and in fact I think they can really make a surprise in the next round.
Several clubs who have the ambition to talk a lot in the UCL this season will be active again in the transfer market in January 2024, they will patch up the lines which are considered to be the team weak points. Big names like Mbappe and Osimhen are always linked with some of the UCL favorite clubs, I can't wait for the International break to end and enjoy the remaining two matches in the Group Phase.