UBS Picks Its ‘Top 12 Stocks’ amid Strong AI Spending

UBS is bullish on select Technology, Media, and Telecom (TMT) stocks, saying AI is creating strong opportunities in some areas while putting pressure on others. In a recent note, the firm named 12 stocks it sees as its “top picks,” backed by solid demand in areas like chips, data centers, and software linked to AI.

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Why UBS Is Positive on TMT

UBS said demand remains strong across several parts of the TMT space, supported by steady spending and ongoing digital adoption. Areas linked to data centers, cloud, and advanced chips continue to see the most strength.

At the same time, the firm noted that some software and media businesses could face slower growth and margin pressure as competition increases.

UBS Top Picks

• Accenture (ACN): UBS believes the market is undervaluing Accenture’s earnings due to macro concerns. The firm sees this gap as sentiment-driven, especially given strong bookings and improving free cash flow. UBS remains positive on the stock, with room for upside as execution stays strong.
• Netflix (NFLX): UBS expects Netflix to outperform peers as industry consolidation supports pricing and cost control. The company continues to invest while growing subscribers and improving monetization through ads and pricing.
• American Tower (AMT): American Tower is seeing steady growth, supported by 5G rollout and rising mobile data usage. UBS also noted that the stock is trading near multi-year lows, with further upside as data demand grows at a strong pace.
• Amazon (AMZN): UBS expects Amazon’s growth to accelerate, supported by its large capex plans and strong backlog. The firm sees revenue growth in the mid-30% range, ahead of current Street estimates.
• Global Business Travel Group (GBTG): UBS expects the company to sustain low double-digit growth through 2027, supported by steady recovery in managed business travel. Its growth outlook remains above overall industry trends.
• Mastercard (MA): Mastercard continues to show strong fundamentals, supported by pricing power and expansion in value-added services. UBS also sees tailwinds from travel recovery, FX trends, and pricing benefits.
• Global-e Online (GLBE): UBS believes Global-e has the scale to operate in a complex environment while remaining less exposed to AI disruption and competitive risks. This supports its long-term growth outlook.
• Entegris (ENTG): Entegris is expected to benefit from an improving semiconductor cycle, especially as demand for advanced materials per wafer rises. UBS sees the company outgrowing the broader industry.
• Palantir (PLTR): UBS highlighted Palantir’s strong position at the intersection of AI and data. Demand remains strong as companies increase spending on both areas.
• Twilio (TWLO): Twilio serves as a key layer in AI-driven communication tools. UBS expects rising enterprise adoption to support steady growth, margins, and lower pricing pressure.
• JFrog (FROG): JFrog is seeing strong demand for its platform. While AI disruption is a risk, UBS believes it is already reflected in the stock, with limited near-term downside.
• Arista Networks (ANET): UBS believes AI-driven demand is not fully reflected in Arista’s estimates. The firm expects revenue growth to come in above guidance, supported by strong demand for AI infrastructure.

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