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Investing.com -- The rally in tech stocks still has room to run as adoption of AI continues to spread across industries, UBS said citing a sharp rise in enterprise AI usage.
Analysts pointed to a recent U.S. Census Bureau report showing AI adoption by American firms rose to 9.2% in the second quarter, up from 7.4% in the first three months of the year and 5.7% in late 2024.
“This means AI adoption is likely to soon cross the 10% threshold, a milestone that took e-commerce over two decades to reach,” the analyst at UBS said.
UBS said rising adoption is being seen in areas well beyond big tech, with some industries reporting rates of 25–30% and producing measurable cost savings.
Examples include Microsoft (NASDAQ:MSFT) using AI for up to 30% of its coding work, and PayPal (NASDAQ:PYPL) handling 80% of its customer support through AI tools.
Despite broader macro risks, including potential semiconductor tariffs and tensions in the Middle East, UBS said structural drivers of AI remain intact and should underpin further gains for tech stocks.
The Nasdaq 100 hit a record high on Tuesday, helped by easing geopolitical concerns.
UBS expects global AI capital spending to rise 33% in 2026 to $480 billion after surging 60% this year.
The bank forecasts 12% earnings growth for the global tech sector in 2025, aided in part by continued dollar weakness that benefits U.S. tech firms with overseas sales.
The bank recommended a balanced approach across the AI value chain, including semiconductor suppliers, software companies and private-market exposure to emerging AI platforms.