UBS remains optimistic about the long-term potential of artificial intelligence, even as technology stocks show signs of weakness and investor sentiment turns more cautious. The brokerage predicts that continued AI innovation will help drive global equity markets higher in the coming months.
The firm’s bullish view is supported by strong capital expenditure forecasts. UBS expects global AI capex to rise to $571 billion in 2026, up from $423 billion in 2025—an increase of about 35%.
By 2030, annual AI spending is projected to reach $1.3 trillion, reflecting a compound annual growth rate of 25%.
UBS also noted that these projections may be conservative. Capex estimates have repeatedly been exceeded in recent years, and demand for computing power could rise faster as AI workloads become more sophisticated.
Financial strength across major tech companies underpins this outlook. Despite increasing investment needs, the largest firms continue to generate strong operating cash flows that more than cover their spending. UBS sees the recent surge in bond issuance from these firms as a strategic choice rather than a sign of stress, and considers their overall funding mix to be healthy.
Addressing concerns about circular financing, UBS highlighted key differences between current market dynamics and those seen during the dot-com era. Some of these worries were sparked by NVIDIA’s recent agreement with Microsoft to invest up to $15 billion in AI developer Anthropic.
UBS estimates that all of NVIDIA’s recent partnerships represent only about 10% of its expected pretax earnings for 2026—far below the excessive financing levels of the late 1990s, when similar deals exceeded 120%. The firm also stressed that today’s transactions operate under far more rigorous accounting and disclosure rules.
On monetization, UBS sees the gap between AI investment and revenue steadily narrowing. Major cloud providers are reporting faster revenue growth, and leadership teams continue to highlight the expanding commercial potential of new AI tools. Companies are also reporting measurable productivity gains, with employees saving time daily through AI-powered systems.
UBS believes that AI’s revenue potential remains very large, even when compared to the substantial investment commitments.
The outlook comes at a time when market volatility is rising. The S&P 500 posted its fourth straight decline on November 18, marking its longest losing streak in three months. Global markets were also unsettled on November 19, with major Asian indexes ending lower as investors waited for NVIDIA’s upcoming earnings report.
