Take Chips Off The Table Before AI Trade Turns, UBS Warns

UBS warns investors to reduce risk in tech stocks as the AI trade becomes increasingly crowded and overvalued. The bank cautions that semiconductor valuations have become extreme with a binary 'winners vs losers' framework, and flags vulnerabilities in the data-center demand thesis that has supported earnings growth. UBS highlights concerning macro conditions including elevated leverage, weak market breadth, and one-sided sentiment that historically precede sharp corrections.