UBS Believes Ongoing Investments Support AI, Power and Resources Themes

UBS analysts believe the momentum behind artificial intelligence remains robust despite recent market hesitation, arguing that sustained capital spending continues to underpin long-term opportunities across AI, power and resources.

In a note this week, UBS told investors that “the pace of AI-related activity shows no signs of slowing”, even as tech shares underperformed on Wednesday and Thursday.

UBS pointed to a flurry of announcements underscoring the sector’s strength. AMD projected faster sales growth over the next five years, Anthropic committed $50 billion to new U.S. data centres, and Meta confirmed plans for a $1 billion facility in Wisconsin. 

At the same time, Infineon expects its AI data-centre revenue in fiscal 2026 to “more than double”, while Cisco raised its full-year outlook, benefiting from “booming AI spending”, UBS noted.

The bank maintains “our conviction that the structural growth of AI will continue to drive equity performance”. 

With tech firms reporting stronger-than-expected demand for AI compute and services, UBS said “accelerating AI monetization” should narrow the gap between investment outlays and revenue. 

Strong balance sheets and AI spending that remains modest relative to global GDP support the case for continued investment, it added.

UBS also highlighted the broader beneficiaries of rising AI capex, saying increased data-centre demand “bodes well for electrical equipment companies” and will continue to drive investment in grid infrastructure. 

The bank forecasts around $3 trillion in combined annual investment by 2030 across power generation, storage, grid infrastructure, data centres and industrial sectors.

Furthermore, despite the recent market gains, UBS does not believe valuations are indicative of a bubble, noting today’s multiples remain far below 1999 levels. 

As innovation continues to support long-term equity returns, UBS said underallocated investors should add exposure to companies aligned with its AI and Power and resources themes.