Artificial intelligence-related transactions have rebounded, driving the latest rally in US stocks. Positive progress in the market application of recently launched AI models and products has further boosted investor confidence. Without making investment decisions on individual stocks, it's worth noting that Marvell has raised its fiscal 2028 revenue forecast above Wall Street expectations, driven by growing demand for customized data center chips and other AI hardware, and offered an optimistic outlook for long-term profitability.
This indicates that overall demand for AI computing power and related infrastructure will remain strong, potentially supporting further capital investment. We expect global AI-related capital expenditure to grow by more than 33% in 2027, reaching $1.2 trillion, providing strong momentum for profit growth in some parts of the AI industry chain. Market consensus forecasts show that Nasdaq 100 component stocks' earnings will grow by 43% this year and a further 28% next year.
While the recent US stock market rally has been primarily driven by technology stocks, the momentum for corporate profit growth has already surpassed that of the AI sector. We expect S&P 500 component stocks' earnings to grow by 25% in 2026 and a further 14% in 2027. The technology sector will remain a significant contributor to profit growth, but we also expect profit improvements in other sectors.
Continued robust consumer spending is expected to support the consumer discretionary sector; active capital markets and a recovery in loan growth will benefit the financial sector; and cyclical improvements in manufacturing are expected to drive robust growth in industrial companies. Furthermore, we are optimistic about the healthcare and utilities sectors, as these two sectors possess defensive characteristics and can benefit from long-term structural growth opportunities.
(The above content is based on UBS's views on October 7th and is for reference only, not investment advice.)
