UBS names healthcare, biotech and pharma as AI diversifiers

what happened

Seeking Alpha reports that Ulrike Hoffmann-Burchardi, UBS’s Americas CIO, believes artificial intelligence could reshape the digital economy in much the same way the internet previously changed the physical economy. In an interview with CNBC, she said investors may be underestimating the disruption risk created by AI. UBS favors “atoms over bits,” meaning the physical economy over traditional digital assets.

Hoffmann-Burchardi said AI coding could reshape conventional software, while AI agents could transform digital advertising and e-commerce. She also pointed to a divide between companies exposed to interest rates and those proving more resilient. The latter group is already generating most of this year’s earnings growth, she said, and UBS expects that to continue. These companies are closely linked to the AI infrastructure buildout, including semiconductors and cloud computing.

The UBS executive dismissed concerns that the AI growth cycle could be losing momentum. In her view, both agentic AI and physical AI are nearing inflection points, with each market potentially reaching hundreds of billions of dollars in revenue over the next five to ten years. Faster private-capital flows into the sector could provide additional support for public-company earnings, she added.

For portfolio positioning, Hoffmann-Burchardi highlighted healthcare, biotech and pharma as key diversifiers. The sectors can provide defensive balance when the AI CapEx trade comes under pressure, while also benefiting from wider AI adoption over time.

why it matters

For markets, the comments point to a possible combination of continued support for AI infrastructure plays and greater attention to healthcare, biotech and pharma as defensive diversifiers.

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