After a wild week on Wall Street, the stock market staged a surprising rally, with the S&P 500 surging 6% by week’s end. President Trump announced a 90-day pause on most of the aggressive tariffs that had sent global equities into a tailspin, while also escalating the trade war with China. Despite this, investors are taking heart from two AI giants: Nvidia and Microsoft.
UBS analysts believe that current stock prices offer opportunities for investors willing to navigate the volatility. Specifically, they’ve pinpointed these two companies as prime targets due to their strong long-term prospects. Nvidia is at the forefront of the AI revolution, with a commanding 80% share of the AI chip market. The company’s unique ecosystem and rapid innovation pace have made it the most valuable company in the world.
However, Nvidia faces concerns about sustaining its growth trajectory. Despite this, UBS analyst Timothy Arcuri rates the shares a Buy, predicting a ~67% gain over the next few months. Microsoft, on the other hand, has been investing heavily in AI and data centers but faces headwinds such as slowing Azure growth and new tariffs on tech imports.
Despite these challenges, UBS analyst Karl Keirstead remains bullish on Microsoft’s prospects. He believes the company is well-positioned to gain market share through its Azure cloud business and has several attractive defensive qualities, including strong cash flow and a stable subscription-based model.
Both stocks boast Strong Buy consensus ratings from analysts, with Nvidia’s stock expected to rise ~57% higher in the months ahead, while Microsoft’s shares are predicted to climb ~30%. With these companies trading at attractive valuations, investors may want to consider them as good ideas for stocks to buy.
Source: https://www.tipranks.com/news/nvidia-and-microsoft-ubs-selects-the-best-ai-stocks-to-buy-amid-market-volatility