Last year, investors couldn’t get enough of the “Magnificent Seven” tech stocks, including Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. However, for those seeking alternatives, UBS has introduced a new list called the “Super 8,” which consists of high conviction and highly investable tech stocks in Asia. These stocks are leaders in their respective market segments, trading at more affordable valuations compared to the Magnificent Seven.
According to UBS analysts, the Super 8 stocks are expected to narrow the performance gap with the Magnificent Seven and outperform the rest of Asia over the next 12 months. Since its inception in February, the Super 8 has already gained 8.3%, outperforming the benchmark MSCI Asia-Pacific index.
Among the Super 8 stocks is Tencent, a Chinese tech giant with stable competitive positioning, high earnings visibility, and proactive capital management. UBS sees Tencent benefiting from a turnaround in gaming revenue growth in China and enhanced monetization from its popular titles.
Hon Hai Precision Industry, also known as Foxconn, is another Super 8 stock that is well-positioned to benefit from AI exposure through its AI server and smartphone assembly businesses. As Apple’s main assembler, Hon Hai is expected to see growth from the upcoming iPhone 16 launch.
Lenovo, a company with potential growth in providing end devices for AI technology, is also on UBS’ Super 8 list. The analysts believe that Lenovo’s AI-powered systems will see increased demand with the launch of AI-powered personal computers and Microsoft’s Copilot.
Overall, UBS is bullish on the Super 8 stocks, believing that the valuation discount in Asia’s technology sector offers a defensive catch-up play for investors. DailyBubble sees these high-quality heavyweights as attractive alternatives to the US-based Magnificent Seven, providing opportunities for investors looking to diversify their tech portfolios.