UBS names 14 priority technology stocks — MarketWatch
UBS analysts named 14 of what they consider the most compelling investment ideas in the technology, media and telecommunications sectors. The bank’s top favorites include Amazon, Texas Instruments, Celestica, TD Synnex and Palantir Technologies. As MarketWatch reports, UBS believes the artificial intelligence spending cycle is still at an early stage, while corporate adoption of AI will provide a new growth impetus.
According to analysts’ estimates, only 8% of surveyed companies have deployed agentic artificial intelligence at scale. UBS also expects continued spending on AI infrastructure as enterprises consolidate suppliers and reduce IT budgets. The bank noted that open AI models are often used through cloud platforms, including Microsoft Azure and Amazon Web Services.
Amazon and Texas Instruments
Amazon is UBS’s top pick among major internet companies. Analysts rate their AWS revenue forecast above the market consensus and expect the market to factor in these estimates as the company’s major customers prepare to deploy Trainium 2 and Trainium 3 chips later this year and in 2027. UBS’s target price for Amazon shares is $318, approximately 25% above the current level.
UBS named Texas Instruments its top choice among chipmakers and semiconductor equipment manufacturers. According to analysts, the demand cycle for analog chips, primarily linked to the automotive and industrial sectors, is rising, while the company is gaining market share. UBS forecasts that even with some slowdown in data-center segment growth next year, Texas Instruments’ revenue could increase by about 20%. The target share price is $380, or 43% higher.
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Data centers and software
Celestica, according to UBS, could benefit from OpenAI increasing production of its first specialized chip next year. Analysts expect this to support revenue growth of at least 70%. The company is a major supplier of Ethernet switching technologies for major cloud operators, including Google and Meta Platforms. UBS’s target price for Celestica is $430, implying 29% upside potential.
UBS also views TD Synnex positively because of its Hyve Solutions unit, which supplies custom servers and networking equipment for data centers. The bank models annual capital expenditure growth for data-center infrastructure of at least 30% over the next three years and set a target price of $352 for TD Synnex shares, or 32% higher.
Analysts described Palantir Technologies as a company operating at the intersection of two key areas of software spending — AI and data. UBS forecasts Palantir’s revenue growth at 88% and margins in the low-60% range. The target share price is $250, compared with $177.64 at the time of the assessment. Other UBS favorites include SS&C Technologies, AT&T, EchoStar, Pinterest, Spotify Technology, Mastercard, Global-e Online, Procore Technologies and JFrog.
