APAC Tech Strategy: September 2026 v2: No signs of AI demand abating

UBS APAC Tech Strategy addresses three key debates. Q1: Is the AI cycle sustainable? UBS view: Yes, with visibility improving into 2028. Agentic AI is taking off and increasingly viewed as the major inflexion point in AI adoption; overall monetization is improving, with hyperscaler/neocloud OCF forecasts raised 30% for 2027; the funding gap between OCF and capex remains the No. 1 risk factor but should be manageable. Q2: Is the memory upcycle sustainable? UBS view: Yes. The DRAM upcycle is now expected to extend towards 2Q28 and NAND to 4Q27. The main risk is overall affordability, as memory industry revenues exceed US$1.6tn in 2027E, with more than 50% consumed by hyperscalers/neoclouds; enhanced LTAs are expected to cover over 50% of industry volumes, implying over 40% become fixed/fixed pricing;