UBS has selected its top tech stocks to power the electric vehicle revolution. “As EV penetration increases and autonomous driving emerges, we are seeing exponential growth within tech supply chains,” UBS analysts led by Grace Chen said June 17. They expect 2026 to be a “tipping point” for electric vehicles, when the global EV market will surpass the combined market size of PCs, smartphones, and servers. And increasing electrification and automation will drive electronic content per vehicle — offering tech companies a key growth opportunity, Chen said. Within the technology sector, UBS believes semiconductor vendors are likely to benefit the most given the significant increase in semi-content in an electric vehicle. The bank expects global semi sales to more than triple from $30 billion in 2015 to $109 billion in 2030, driven by advanced driver assistance systems (ADAS) and powertrains. Stock picks Within the power semi-area, UBS likes Infineon, which it believes is “one of the biggest and best placed” beneficiaries of the coming EV revolution. It also likes Nvidia in the ADAS range. The bank views the stock as a core stock for any growth portfolio and sees cars as a “rich playing field” for the company. It also sees “rich opportunities” for the company to repeat its partnerships with Mercedes and Jaguar Land Rover. Delta Electronics from Taiwan is also on the UBS list. The bank believes that Delta is “ahead of many Taiwanese hardware competitors” when it comes to electric vehicles and expects the company to post 19% year-over-year earnings growth in 2022, largely driven by its electric vehicle portfolio is. UBS said it is bullish on Japanese electric motor maker Nidec as it focuses on the EV motor business. The bank also sees opportunities for the company in new areas such as machine tools for EV parts. French auto supplier Valeo is another stock UBS likes. The company believes that the company is one of the best positioned automotive suppliers to expand market share in EV powertrains. Another analyst favorite is Irish auto parts maker Aptiv, which UBS ranks as one of the highest-quality names in autos. The bank also believes the company is well positioned to capitalize on the strength of the US market. The German automotive supplier Vitesco Technologies is also on the list. The bank noted that the company has completed its transition to electrification and now has one of the largest electrification product portfolios. Eyes on Apple According to UBS, more than 50% of the materials used in an electric vehicle relate to electronic content, compared to just 10% in a conventional internal combustion engine vehicle. The bank believes tech companies will benefit as EV brands increasingly work directly with them, while the emergence of open platforms will allow tech companies to establish their presence in the EV ecosystem. “We expect technology companies to accelerate their investment in the automotive industry as IT products continue to grow, thereby gaining market share in the automotive sector from a low base,” said Chen. UBS is also keeping an eye on Apple should the tech giant decide to enter the EV market. The bank said the company will most likely stick to an asset-light strategy that could turn EVs into a smartphone-like supply chain, according to Chen.
