Tech stock volatility provides opportunity to gain AI exposure, UBS says
Main U.S. indexes advance ahead of FOMC minutes at 2 PM ET
Financials lead S&P 500 gainers; Comm Svcs weakest group
Dollar up; gold, bitcoin, crude decline
U.S. 10-Year Treasury yield edges up to ~4.07%
Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com
TECH STOCK VOLATILITY PROVIDES OPPORTUNITY TO GAIN AI EXPOSURE, UBS SAYS
The technology-heavy Nasdaq .IXIC is on track for its second consecutive day of gains on Wednesday, signifying improving market sentiment over the sector.
But tech stocks had weakened by more than 1% on Monday amid worries that the Federal Reserve would cut rates at a slower pace given strong U.S. economic data.
The fact that October is historically a volatile for tech stocks had also weighed on the sector. However, UBS analysts said they remained positive for tech stocks owing to the outlook for artificial intelligence (AI). And that investors should capitalize on the current volatility to building "long-term AI-exposure".
Underlying this outlook is continued spending on AI into 2025, according to UBS. Major technology giants including AlphabetGOOGL.O and Meta META.O have flagged risks to underspending on AI, rather than overspending, with analysis showing big tech's combined capital expenditure intensity still below historical levels. Furthermore, a range of AI customers, including cloud platforms, enterprises, and sovereign entities have pledged additional AI spending.
Third-quarter results of AI companies, particularly semiconductor firms, should provide a catalyst for markets as investor focus shifts to tech fundamentals as earnings season begins this week.
"While second-quarter results were mixed, we expect tech and AI companies to "beat and raise" for the September quarter," according to UBS analysts led by Solita Marcelli, chief investment officer for Americas for global wealth management.
Given the product development roadmap of major chipmakers, the stage is now set for extensive technology upgrade and a leap in computing power over the next five years, leading to reduced transistor sizes. Smaller chips should result in significant performance improvements in chips and elevated investment in AI chips, according to UBS.
"We continue to favor the semiconductor space and megacaps for AI exposure, and recommend investors consider structured strategies or a buy-the-dip approach for quality AI stocks," the analysts said.
(Chibuike Oguh)
*****
FOR WEDNESDAY'S EARLIER LIVE MARKETS POSTS:
STOCKS HAVE RISEN BUT WHO SAYS THEY'RE DONE - CLICK HERE
UH-OH - AS THE MARKET STEAMS ALONG, IS THAT AN ICEBERG AHEAD? - CLICK HERE
TOO HOT TO HANDLE: RISING MORTGAGE RATES PROMPT REFI DEMAND PLUNGE - CLICK HERE
U.S. STOCKS TICK UP AHEAD OF THE MINUTES - CLICK HERE
S&P 500 INDEX JUST SHY OF ITS RECORD HIGHS - CLICK HERE
BULLISH FACTORS BEHIND GOLD RALLY TO CONTINUE - UBS - CLICK HERE
U.S. ELECTION RISK RIPPLES THROUGH MEXICAN PESO OPTIONS - CLICK HERE
NO NEED TO PANIC AS TURBULENT EARNINGS SEASON LOOMS - CLICK HERE
STOXX INCHES UP, OFF 2-WEEK LOWS - CLICK HERE
EUROPEAN FUTURES POINT TO MUTED START - CLICK HERE
CHINA STOCKS GET A REALITY CHECK; EUROPE SHUDDERS - CLICK HERE
Aset Terkait
Berita Terbaru
Pengungkapan: Entitas XM Group menyediakan layanan khusus eksekusi dan akses ke Fasilitas Trading Online kami, yang memungkinkan Anda untuk melihat dan/atau menggunakan konten yang tersedia pada atau melalui situs, yang tidak untuk mengubah atau memperluas, serta tidak mengubah atau memperluas hal tersebut. Akses dan penggunaan ini selalu sesuai dengan: (i) Syarat dan Ketentuan; (ii) Peringatan Risiko; dan (iii) Pengungkapan Penuh. Oleh karena itu, konten disediakan hanya sebagai informasi umum. Anda juga harus ketahui bahwa konten Fasilitas Trading Online kami bukan sebagai ajakan atau tawaran untuk untuk melakukan transaksi apa pun di pasar finansial. Trading di pasar finansial mana pun melibatkan tingkat risiko yang signifikan pada modal Anda.
Semua materi yang diterbitkan di Fasilitas Trading Online kami hanya untuk tujuan edukasi/informasi dan tidak boleh mengandung nasihat dan rekomendasi finansial, pajak investasi atau trading, catatan harga trading kami, penawaran, permintaan, transaksi dalam instrumen finansial apa pun atau promo finansial untuk Anda yang tidak diminta.
Konten pihak ketiga apa pun, serta konten yang disiapkan oleh XM, seperti opini, berita, riset, analisis, harga, informasi lain atau link ke situs pihak ketiga yang tersedia "sebagaimana adanya", sebagai komentar pasar umum dan bukan menjadi nasihat investasi. Sejauh konten apa pun ditafsirkan sebagai penelitian investasi, Anda harus memperhatikan dan menerima bahwa konten tersebut tidak dimaksudkan dan belum disiapkan sesuai dengan persyaratan hukum yang dirancang untuk mempromosikan kemandirian riset investasi dan dengan demikian akan dianggap sebagai komunikasi pemasaran di bawah hukum dan peraturan yang relevan. Mohon dipastikan bahwa Anda telah membaca dan memahami Notifikasi pada Riset Investasi Non-Independen dan Peringatan Risiko kami mengenai informasi di atas, yang dapat diakses disini.
