UBS Global Wealth Management strategists downgrade US information technology stocks

Glonghui, February 10th｜UBS Global Wealth Management strategists have downgraded the S&P 500 Information Technology sector rating from Attractive to Neutral, citing a potential slowdown in capital expenditure growth among the industry’s mega-cap companies. The team led by Mark Haefele pointed out that the deceleration in growth could be a negative for some companies in the “enabler layer.” They still expect capital expenditure to remain at a high level over the longer term. They noted that, given the risks of intensifying competition, the software industry may continue to face uncertainty, and also mentioned that valuations for technology hardware are already high. However, they still find artificial intelligence attractive, stating that “AI opportunities are not limited to this sector.”