The so-called “Big Seven” were last year’s hottest stocks, with investors piling into Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia and Tesla. But for those looking for alternatives, UBS has updated its list of Asia’s “most confident and investable” technology stocks. The bank said these stocks dominate their respective segments, such as the top seven stocks, but have lower valuations. Analysts at the investment bank wrote in a July 11 research note that these companies, known as “Super 8”, are expected to “narrow the performance gap with the Magnificent 7 and outperform the rest of Asia over the next 12 months.” area”. “With strong earnings growth prospects and attractive valuations compared to global technology peers, we believe these high-quality heavyweights offer attractive alternatives to the U.S. ‘Magnificent 7.'” As of now, The UBS Asia Super 8 Index has gained 8.3% since its launch in February, outpacing the 6.7% gain in the benchmark MSCI Asia Pacific Index. “We believe valuation discounts across the entire value chain of Asia’s tech sector provide investors with defensive catch-up opportunities,” UBS analysts wrote. Here’s a look at UBS’s Super 8 stocks and their picks, based on FactSet consensus price targets Upside Potential: Tencent Chinese tech giant Tencent is a member of UBS’s latest list, thanks to what UBS describes as “relatively stable competitive environment, higher earnings” visibility, reasonable valuation and aggressive capitalization manage. The company, UBS’s top pick in China’s internet sector, is expected to “benefit from an upturn in China’s gaming revenue growth, new game launches that may perform better than expected, and Evergreen Games’ stronger profitability,” analysts wrote. They also noted that further updates to its AI feature integration – particularly on WeChat or WeChat – should accelerate its AI monetization and provide more support for its growth momentum, which Tencent has been making headlines of late, including. Several analysts are bullish on the stock, including Goldman Sachs, which has included Tencent stock in its investment list. The stock is listed on the Hong Kong Stock Exchange and is listed as an American depositary receipt (ADR) in the United States. The giant’s shares are up 32.9% year-to-date. Hon Hai Precision Industry, the world’s largest electronics contract manufacturer, is another new addition to the Super 8 list as the company is “well-positioned to benefit from the artificial intelligence sector. Especially through its AI server and smartphone assembly businesses, UBS analysts noted that the company, also known as Foxconn, expects its AI server segment to grow by more than 40% annually, they added. , as a major Apple assembler, Hon Hai is well-positioned to benefit from the demand boost from the iPhone 16 launch. Hon Hai’s shares trade as American Depositary Receipts on the Taiwan Stock Exchange and in the United States. Its stock price is trending upward. , up nearly 107.2% year-to-date. Lenovo Lenovo is another company that has just entered the Super 8 list. UBS likes its “potential for growth by providing various terminal devices for artificial intelligence technology.” “We expect that artificial intelligence’s higher requirements for computing power and new artificial intelligence functions will support the demand for Lenovo terminal devices.” For example, analysts expect the launch of artificial intelligence-driven personal computers and Microsoft Copilot to begin in the second half of this year Increased demand for Lenovo’s artificial intelligence-driven systems. Lenovo’s shares trade on the Hong Kong exchange and in the United States as American Depositary Receipts. Its shares have been falling, but are up nearly 0.4% year to date. —CNBC’s Michael Bloom contributed to this report.
