UBS Sees 25% Upside for Amazon Stock Amid AI Investment Cycle

UBS analysts believe that the AI spending cycle is still in its early stages and has identified 14 'highest-conviction calls' across technology, media, and telecommunications sectors.

The next phase of AI growth will be driven by enterprise adoption, as only a small share of companies surveyed have deployed agentic AI at scale. Currently, only 8% of the surveyed companies have implemented the technology at scale.

UBS expects businesses to increase spending on AI infrastructure, even as some companies consolidate technology vendors and reduce broader IT budgets.

The analysts also noted that open-source AI models are gaining traction due to their perceived cost advantages. However, enterprises often deploy these models through major cloud platforms like Microsoft Azure and Amazon Web Services (AWS).