UBS bullish on AI amid tech sector uncertainties, foresees significant industry growth

UBS, the Swiss banking giant, has expressed a bullish stance on the artificial intelligence (AI) sector, viewing the recent 8% decline in the as a promising investment opportunity. This downturn was driven by rising yields, mixed results, and concerns about the Federal Reserve’s high interest rates aimed at controlling inflation.

The bank’s research team, led by Chief Investment Officer Mark Haefele, believes that these tech stocks are currently undervalued. They anticipate a valuation rebound as investors recognize the potential of AI in enhancing earnings and capitalizing on new products.

UBS further predicts a substantial expansion of the AI industry. The bank projects that this sector will grow from $2.2 billion in 2022 to an impressive $170 billion by 2027. This growth is expected to contribute to 20% of the tech sector’s total earnings growth next year, following a surge powered by ChatGPT.

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