UBS Sees Tech Sector Resilience Despite Meta

Nadia Lovell of UBS discussed the recent volatility in tech stocks amid speculation about a strategic pivot by Meta. While some market participants worry that hyperscalers may have overbuilt cloud capacity without corresponding monetization, Lovell views the potential offloading of excess capacity as a constructive move that could improve capital efficiency and margins over time. She emphasized that demand for cloud services remains strong, citing robust cloud revenue growth among hyperscalers and increasing enterprise adoption rates in the U.S. Despite the recent sell-off in certain cloud-related stocks, Lovell believes capital expenditure plans for this year and next are largely set, with limited upside but no immediate slowdown. (Source: Bloomberg)