UBS Unveils Updated List of Top Tech Stocks in Asia Amid Market Shifts
- UBS updates stock picks to compete with the Magnificent 7 in Asia.
- Stocks expected to narrow performance gap and outperform rest of Asia in the next 12 months.
- UBS focuses on enhancing stock performance to rival top players in the region.
UBS has refreshed its selection of "highest conviction and most investable" tech stocks in Asia, highlighting companies that dominate their market segments while trading at more attractive valuations. The bank's Asian Super 8 portfolio has seen an 8.3% increase since its launch in February, outperforming the benchmark MSCI Asia-Pacific index, which returned 6.7%. UBS analysts believe that the current valuation discounts in Asia's technology sector present a defensive opportunity for investors. Among the newly featured stocks is Tencent, a leading Chinese tech firm recognized for its stable competitive environment and high earnings visibility. UBS has identified Tencent as its top pick in the China internet sector, anticipating a rebound in gaming revenue growth driven by new game launches and improved monetization strategies. The integration of AI functions, particularly within its WeChat platform, is expected to further enhance Tencent's growth trajectory. Another notable addition is Hon Hai Precision Industry, the world's largest contract electronics manufacturer. Positioned to capitalize on the growing demand for AI, particularly through its AI server and smartphone assembly operations, Hon Hai is also set to benefit from the anticipated demand surge linked to the iPhone 16 launch. The company's shares have surged nearly 107.2% year-to-date, reflecting strong market confidence. Lenovo, traded on the Hong Kong Exchange and in the U.S. as an ADR, is also highlighted for its potential growth driven by AI's increasing computing power requirements. UBS's analysis suggests that these companies are well-positioned to thrive in the evolving tech landscape.