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The momentum of artificial intelligence (AI) is only in its initial stages and is expected to propel technology stocks upward throughout the remaining years of the decade, according to insights from UBS in a Tuesday note.

The bank anticipates widespread adoption of AI technologies across various industries and their integration into numerous products in the coming years. This surge in AI utilization is poised to fuel the demand for an increasing array of tech products and services.

Solita Marcelli, Chief Investment Officer of UBS Global Wealth Management, expressed optimism, stating, "Despite the strong growth trends seen so far, We think the AI narrative is still in its early stages, and a favorable environment is expected to provide ongoing support.

Recent announcements of AI-driven capabilities in products are viewed as substantial catalysts for the tech stocks, with notable examples such as Microsoft's Copilot subscription service and innovative features like the summoning button within its software.

Major players like Volkswagen, Samsung, and Hyundai are also embracing AI technology, integrating it into cars, voice assistants, and smart homes.

"We think 2024 is the year of AI's democratization, with broader AI edge-computing or on-device AI computing set to take off," highlighted Marcelli.

The anticipated surge in AI utilization is expected to contribute to increased tech profits, leading to higher stock prices. Marcelli, citing positive management commentary at the recent CES conference, is confident in her forecast of a 10% earnings growth in Q4 2023, accelerating to mid- to high-teens growth in the subsequent quarters.

UBS projects a significant expansion in AI industry revenues, expecting a 15x growth from $28 billion in 2022 to $420 billion in 2027. This optimistic outlook positions AI as a dominant tech theme of the decade.

"In our view, AI could arguably be the tech theme of the decade, as we don't see similar growth profiles elsewhere. We believe AI will remain the key theme driving global tech stocks again this year and the rest of the decade," Marcelli emphasized.

For investors seeking exposure to the AI trend, Marcelli recommends focusing on holdings in the semiconductor and software industries, with additional opportunities likely in memory and AI edge-computing.