Investment bank UBS predicts AI to be most significant innovation, with massive revenue potential.

From Nasdaq: 2024-07-20 04:12:00

Swiss investment bank UBS estimates AI will add $1.2 trillion annually to the global economy by 2027, with revenue from the enabling layer reaching $516 billion, the intelligence layer reaching $255 billion, and the application layer reaching $395 billion. AI is predicted to be the most profound innovation and significant investment opportunity in human history.

Nvidia’s GPUs are crucial for accelerating complex data center workloads, making modern AI possible. The company’s branching into adjacent hardware, software, and cloud services enhances its ability to monetize AI. With an annual EPS growth rate of 38% through fiscal 2027, its current P/E ratio of 66.7 looks reasonable for investors.

Broadcom dominates the data center networking chips and ASIC markets, with 80% and at least 55% market share respectively. Fast chips are essential for AI applications, and demand for AI-related semiconductor products is expected to grow 20-30% annually. Wall Street expects Broadcom’s EPS to grow at 21% annually through fiscal 2027, with a current P/E ratio of 36.7.

Super Micro Computer leads in building high-performance computing platforms optimized for AI. Its ability to quickly bring new technologies to market ahead of competitors makes it a market leader. With expected AI server market growth of 460% between 2023 and 2027, Supermicro’s EPS is forecasted to grow at 41% annually through fiscal 2026, with a current P/E ratio of 42.3.



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