UBS: AI Investment Cycle Expands, Market Becomes More Selective on Returns

The news indicates that the artificial intelligence investment cycle is expanding, but greater selectivity in returns is required. NVDA shares have risen nearly 7% in the last 24 hours, with the RSI at 60, suggesting that buying pressure may continue in the short term. Although the MACD is just below the signal line, the price being above the 20- and 50-day moving averages supports the upward trend. However, the news's emphasis on selectivity and the RSI approaching overbought territory suggest that the rally may be limited. While an upward movement is expected in the short term, caution is advisable.

Although AMD shares rose 6.1% in the last 24 hours, the RSI stands at 49.9, indicating neutral territory, and the price closed below the 20-day moving average of 334.5. The MACD remains below the signal line, suggesting weak short-term momentum. A recent UBS report notes that the AI investment cycle is expanding but advises selectivity in returns, offering a generally positive sector outlook for AMD while encouraging caution. With technical indicators providing no clear direction, a sideways trend is expected in the near term.

ASML shares have fallen nearly 2% from the previous close, currently trading at 1384.56. While the RSI at 35.26 approaches oversold territory, the MACD line remains below the signal line and in negative territory. Closes below the 20-day and 50-day moving averages indicate short-term weakness. UBS noted that the AI investment cycle is expanding but urged greater selectivity, which may reflect a cautious stance toward semiconductor equipment companies like ASML. Therefore, the downtrend is likely to continue in the near term.

AVGO shares have declined more than 5% in the last 24 hours, falling to 399.83. While the RSI at 34.6 approaches oversold territory, the MACD line remains below the signal line and in negative territory, indicating weak short-term momentum. The price is trading below both the 20-day (411.61) and 50-day (410.82) moving averages, further darkening the technical outlook. A recent report from UBS notes that the AI investment cycle is expanding but calls for greater selectivity, reflecting a cautious stance on AI-focused stocks like AVGO. The risk of continued selling pressure in the near term is high, though oversold conditions could signal a potential bounce.