UBS CEO: AI Stock Pullback Reflects Overly High Hopes

UBS CEO Sergio Ermotti said at a UBS conference in Sydney that the sharp pullback in AI stocks in recent weeks came from investors having overly high expectations. Market pricing had been built on the belief that everything would go perfectly.

He believes the recent US midterm election results and global discussions about infrastructure expansion could slow the AI industry's progress. He sees economic benefits from AI, but thinks the market is too optimistic about how fast results will come. Earlier, fears of tighter US rules wiped trillions of dollars off global stock markets.

US stocks then rebounded widely. The Philadelphia Semiconductor Index rose as much as 6.57%, AMD jumped 13.2%, Nvidia gained 6.44%, TSMC rose 7.55%, and Micron climbed 9.07%. Just a day earlier, the Nasdaq had plunged 5.5%, its biggest single-day drop since April 2025, falling into correction territory.