Stock market today: S&P 500 climbs as health care, tech gain; Nvidia earnings loom
Investing.com -- UBS has increased its exposure to Microsoft (NASDAQ:MSFT) and Meta Platforms (NASDAQ:META) while cutting back on Apple (NASDAQ:AAPL), Alphabet (NASDAQ:GOOGL), and Amazon (NASDAQ:AMZN), citing growing confidence in the long-term value of artificial intelligence (AI) across multiple layers of the tech ecosystem.
“We reduce the weightings for Apple by 1 percentage point (ppt), Alphabet by 1.5ppt, and Amazon by 0.5ppt, and increase the weightings for Microsoft by 2pps, and Meta by 1ppt,” UBS analysts wrote in a recent note on transformational innovation.
UBS believes “we are still in the early innings of the AI growth story” and highlighted strong capex trends and improving monetization as key tactical drivers over the next 12 to 18 months.
The firm favors “AI infrastructure names with strong pricing power,” as well as platform and application players positioned for real-world AI use cases.
Microsoft, described as “at the forefront of generative AI initiatives,” was singled out for its scale, recurring revenues, and rapid ramp-up in AI contribution.
“We believe Microsoft is at an inflection point, with growth acceleration and strong recurring revenues about to fuel growth over the next few years.”
Meta also earned praise for its dominant position in digital advertising and execution in AI.
“We see strong execution on Llama AI models, which are among the best in the open-source community,” UBS said, adding that Meta’s valuation still does not fully reflect its “positioning and growth potential.”
Despite recent volatility in tech stocks driven by tariff uncertainty and geopolitical risks, UBS sees current conditions as an opportunity to build long-term exposure.
“We would use any near-term volatility in AI-related companies... to build strategic and long-term AI exposure,” analysts wrote.
UBS continues to view AI as “the most profound innovation in human history.”