Introduction
UBS analysts remain bullish on the global AI sector, forecasting mid-teen returns in 2025. With AI adoption accelerating and investment commitments rising, the bank highlights AI as the defining tech theme of the decade. Despite AI stocks' strong past performance, UBS believes the rally has more room to grow.
Since the launch of ChatGPT in late 2022, the NASDAQ 100 has surged over 84%, hitting all-time highs. UBS attributes this to confidence in AI's coexistence between low-cost and high-cost models, each serving unique applications and expanding AI integration across industries.
AI Market Growth and Revenue Projections
For global markets (excluding China), UBS forecasts AI spending to reach nearly $500 billion by 2026, with AI-related revenues matching that figure. The demand for AI-driven solutions could unlock a $1 trillion opportunity, creating substantial profit potential.
Key Financial Estimates:
- Global AI operating profits (2025): Expected to reach $350 billion
- Projected AI market capitalization: UBS applies a 30x multiple to next year's operating profits, estimating the sector's total valuation at $10.5 trillion by year-end 2025, up from $9 trillion today
To analyze financial statements of major AI firms, investors can leverage the Annual Reports API for deeper insights into revenue trends and strategic growth initiatives.
China's AI Sector: Rebounding Amid Regulatory Changes
While China's AI sector previously lagged due to regulatory scrutiny, it has rebounded 25% in the past month following excitement around DeepSeek's low-cost, high-performance AI model. UBS expects the sector to maintain low-teens annual returns over the next three years.
China's AI Projections:
- AI spending: Expected to hit $30 billion by 2028
- AI-related revenues: Forecasted to reach $50 billion
For tracking the most active AI stocks globally, investors can use the Market Most Active API to monitor real-time trading volumes and market sentiment.
Investment Outlook: Key AI Sectors to Watch
Despite macroeconomic uncertainties, UBS encourages investors to "buy the dip" in quality AI stocks, favoring:
- Large-cap AI leaders (e.g., NVIDIA, Microsoft)
- Cloud platforms (AWS, Google Cloud)
- Semiconductor firms (TSMC, AMD)
As AI innovation accelerates, companies benefiting from AI-driven automation, cloud computing, and data analytics are likely to see continued growth.
Conclusion
UBS remains optimistic about AI's long-term growth, citing continued investment momentum and evolving AI applications. With AI-related revenues set to surpass $500 billion by 2026, the sector's expansion presents significant opportunities for investors focusing on high-quality AI stocks.
