AI Revolution: UBS Predicts Explosive Market Growth and Tech Investment Potential
In recent times, there has been a surge of interest and investment in artificial intelligence (AI) technologies.
The potential of AI to transform various industries has attracted significant attention and investment from both venture capitalists and established companies.
UBS, a prominent Swiss investment firm, shares these perspectives. Analysts at UBS have indicated that the broader AI hardware market could reach a valuation of $90 billion by 2025, with a compound annual growth rate (CAGR) of 20%, according to a recent market research report published on Friday, May 12.
The bank perceives AI as a “horizontal technology” with significant applications across diverse industries and sectors.
Alongside AI, big data and cybersecurity are also anticipated to experience strong growth in the forthcoming years, as highlighted in the UBS report.
“We believe these three fundamental technologies are at crucial turning points and will experience accelerated adoption over the next few years as enterprises and governments intensify their focus and investments in these areas,” stated UBS in the report.
UBS also suggests that other technology-related sectors, including the metaverse and smart automation, may perform well.
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According to UBS, the AI projections are part of a comprehensive report on tech stocks. The Zurich-based investment bank expressed its cautious stance on the global information technology sector due to elevated valuations of tech stocks.
Nevertheless, UBS argues that there are still investment opportunities within the sector. Technology remains the largest component of the MSCI All Country World Index, comprising 22.5% of the equity index, which is significantly higher than the financial sector’s weightage of 13.9%.
That being said, UBS advises investors to evaluate their existing allocations in tech stocks before making any adjustments. The bank believes that it may still be advisable to selectively increase exposure to tech stocks and recommends keeping exposure “slightly below the benchmark” instead of significantly reducing tech holdings.
For investors seeking short-term capital preservation, UBS suggests shifting away from highly cyclical stocks, such as semiconductor companies based in Asia, and seeking refuge in sectors that are less impacted by an economic slowdown, such as software.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
