UBS says AI investment will remain a major driver of global equity returns in 2027, despite investor concerns over infrastructure costs, financing risks and whether tech firms can turn spending into profits. The bank raised its estimates for global AI capital expenditure to $1 trillion in 2026 and $1.4 trillion in 2027, and forecast $1.5 trillion for 2028. Cloud revenue growth at Alphabet, Microsoft and Oracle reached 103%, 48% and 62% respectively in their latest quarters, but UBS warned that financing pressures at specialist cloud providers, known as neoclouds, could cause delays and consolidation, although they account for only about 8% of its capex estimate. For investors in the US and UK, UBS said the AI theme remains attractive but calls for greater selectivity, diversification across the AI value chain and exposure to financially strong companies with pricing power. It favours foundries, computing and power infrastructure, and expects greater volatility as focus shifts from spending commitments to monetisation and returns.
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Related tickers and likely impact
MSFT
▲ Likely positiveMicrosoft
Relevance: medium
| Market | US stocks |
|---|---|
| Sector | Information Technology |
| Industry | Systems Software |
| Market cap | $3.9T |
| Close on 10/30/2026 | 521.90 |
| Change that session | -1.55% |
NVDA
▲ Likely positiveNvidia
Relevance: medium
| Market | US stocks |
|---|---|
| Sector | Information Technology |
| Industry | Semiconductors |
| Market cap | $5.1T |
| Close on 10/30/2026 | 204.81 |
| Change that session | -4.14% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
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