Artificial intelligence-related stocks have been on the rise this year, and UBS is becoming even more bullish on some names. Nvidia has been the bellwether for names in the space, and the chip darling has surged about 186% this year. In comparison, the S & P 500 has risen more than 22% in 2024.
"We believe we are still in the early stages of the AI growth story," UBS equity strategist Sundeep Gantori wrote in a Monday note to clients, noting the launch of ChatGPT in 2022 as an inflection point for AI adoption. "While the theme's initial gains thus far have been led by semiconductors due to their dominant presence in the enabling layer, we see appealing opportunities ahead, including beneficiaries in other sectors and regions as the AI investment opportunity broadens." Gantori noted most analysts agree that annual revenues related to the AI industry could pass the trillion-dollar threshold within the next decade.
"Overall, we would use any near-term volatility in AI-related companies — due, for example, to weak seasonality and geopolitical escalations — to build strategic and long-term AI exposure, given the solid outlook for AI over the next 12-18 months amid robust [capital expenditure] growth and improving monetization," he continued. In light of this, UBS refreshed its new global AI portfolio, incorporating an updated stance on Meta Platforms . The firm is especially favorable toward AI infrastructure stocks that have strong pricing power and competitive positioning, a.