UBS' survey results point to Nvidia, Microsoft and OpenAI as key AI winners

Investing.com -- Nvidia (NASDAQ:NVDA ), Microsoft (NASDAQ:MSFT ), and OpenAI are the key AI beneficiaries, UBS analysts said, citing results of its latest enterprise AI survey.

The survey, which gathered insights from IT executives across 125 organizations, reflects an incremental change from the previous survey conducted in May 2024.

The findings reveal that all respondents are exploring AI to some degree, with 61% now actively using AI in at least one functional area, up from 52% in May 2024. However, only 11% have scaled AI production, with 89% eyeing the second half of 2025 or 2026 to advance their AI initiatives.

This slower-than-expected adoption rate, attributed to uncertainties around return on investment (ROI), has tempered investor expectations for a significant AI-driven boost in the first half of 2025.

Regarding IT spending, the surveyed organizations anticipate a 4.4% increase in their 2025 budgets, a slight decrease from the 5.6% expected growth reported in May 2024 but consistent with the 4.1% increase from the previous year.

“This result points to more of a stable spending backdrop going forward, not an inflection, although note that this survey took place just BEFORE the latest US election,” UBS analysts led by Karl Keirstead noted.

In the hardware sector, Nvidia remains the preferred AI compute platform, with its technology being used not only for training but also increasingly for inference.

Meanwhile, Microsoft Azure has solidified its position as the top cloud infrastructure provider for hosting AI workloads, with Amazon (NASDAQ:AMZN ) Web Services (AWS) maintaining its second-place ranking.

The survey did not identify any significant GPU or compute capacity constraints, indicating that supply-demand imbalances are more pronounced among large language models (LLMs) and AI startups.

At the model layer, OpenAI's GPT 4.0 and GPT 3.5 have extended their lead over competitors such as Meta (NASDAQ:META )'s open source Llama model family and Google (NASDAQ:GOOGL ).

As for AI-powered applications, Microsoft's planned roll-outs of M365 Copilot and GitHub Copilot's dominance in the AI code generation market were highlighted, as well as OpenAI's strong presence in creative AI with DALL-E and Sora.

ServiceNow (NYSE:NOW ) continues to lead in internal-facing AI applications, and there's growing interest in custom AI solutions.

Finally, the survey indicates a positive outlook for companies like Databricks and Snowflake (NYSE:SNOW ), as well as hyperscalers, in terms of data software as organizations aim to organize their data estates in 2025. This trend appears less favorable for Oracle (NYSE:ORCL ) and MongoDB (NASDAQ:MDB ), analysts said.

Source: Investing.com