UBS Sees 25% Upside in Amazon Stock Amid AI Growth

The AI spending cycle is still in its early stages, according to UBS analysts. They see opportunities for investors across technology, media, and telecommunications as companies move from experimenting with AI to deploying it at scale.

The UBS team has identified 14 'highest-conviction calls' across the TMT sectors, with many of the companies positioned to benefit from continued spending on AI infrastructure, cloud services, chips, networking equipment, and enterprise software. The analysts said the next phase of AI growth is likely to be driven by enterprise adoption.

The analysts expect businesses to increase spending on AI infrastructure even as some companies consolidate technology vendors and reduce broader IT budgets. They noted that open-source AI models are gaining traction because of their perceived cost advantages, but enterprises often deploy those models through major cloud platforms like Microsoft Azure and Amazon Web Services.