UBS – TechGPT, 2024

UBS expects the revenue growth of the AI industry to increase by 40%, raising their revenue growth forecast by 15x between 2022 and 2027. They anticipate revenues to expand from USD 28 billion in 2022 to USD 420 billion in 2027, with a 72% compound annual growth rate (CAGR). This growth is expected to be driven by increased infrastructure spending, particularly in GPU cloud and AI edge-computing, which is projected to have a 50% CAGR and rise from USD 25.8 billion to USD 195 billion during the same period. Additionally, there is predicted to be solid growth for AI applications and models with a 152% CAGR, increasing from USD 2.2 billion to USD 225 billion. UBS believes that AI will continue to be the key theme driving global tech stocks in 2024 and beyond. They expect the semiconductor and software industries to benefit from the AI wave, with both expected to achieve solid double-digit profit growth and operating margins of over 30% in 2024. The rise of AI is anticipated to lead to further consolidation in the global tech industry, favoring industry leaders with strong financial resources and early entrant advantages. The launch of applications like ChatGPT and features such as Turbo and vision from OpenAI signals the arrival of the App Store moment for the AI industry. This is expected to drive innovation in the global tech industry in 2024 and potentially revive prospects in the venture capital/private market space. While uncertainties remain regarding regulations and geopolitics, UBS expects strong mid-teen earnings growth for tech in 2024. In their TechGPT report, they address pressing questions about AI forecasts, opportunities in AI infrastructure, rising AI monetization trends, and the risks and opportunities associated with AI. They encourage readers to send in further questions for future publications.