UBS has identified two preferred names in the Internet & Media universe that together form a deliberate risk-balanced pairing for uncertain macro and geopolitical conditions. The bank's selections reflect a strategy that combines a higher-growth, cyclical digital platform with a defensive media incumbent built on proprietary data and pricing power.
For its Internet pick, UBS spotlights AUTO1. The bank contends that investor fears around AI disruption for the company have been overstated and could, in time, act as a tailwind rather than a headwind. According to UBS, AUTO1's scale, access to financing and margin leverage create potential upside relative to its conservative guidance for 2026. UBS expects that successful execution could translate into gains across volumes, profitability and operational efficiency. Given a more challenging macro backdrop, UBS characterizes AUTO1 as a higher-beta idea with idiosyncratic drivers that could outperform should the company continue to out-execute expectations.
In the Media space, UBS favors RELX Group Plc as a defensive compounder. The bank points to resilient, proprietary data assets and strong pricing power as core strengths that help insulate RELX from both macro and geopolitical uncertainty. UBS also regards investor anxiety over AI-related disruption as overdone for RELX, arguing that the company’s embedded datasets and the adoption of AI-enabled workflows actually strengthen its competitive moat. UBS highlights consistent top-line growth and sustained demand across RELX’s legal and professional information segments, and notes that an expanded buyback program signals management confidence. Collectively, these attributes support UBS’s view of RELX as a stable performer amid ongoing uncertainty.
The pair of recommendations is framed as a barbell: one name with higher upside potential tied to operational execution and market cyclicality, and another built on data durability and pricing resilience. UBS presents both picks as responses to investor worry over AI disruption, taking the position that such concerns are being overstated and that company-specific advantages should remain intact.
Key points
- UBS pairs a higher-beta digital platform (AUTO1) with a defensive, data-driven media incumbent (RELX) to navigate a volatile macro backdrop.
- AUTO1 is seen as having potential upside to conservative 2026 guidance via scale, financing strength and margin leverage, with expected improvements in volumes, profitability and efficiency.
- RELX is portrayed as a defensive compounder supported by proprietary datasets, pricing power, steady top-line growth and an expanded buyback program.
Risks and uncertainties
- Execution risk for AUTO1 - the bank's bullish view depends on the company continuing to outperform expectations in volumes, margins and operational metrics.
- Persisting investor concerns about AI disruption - while UBS considers these fears overstated, continued market skepticism could weigh on sentiment and share performance across both sectors.
- Macro and geopolitical uncertainty - both picks are positioned with this backdrop in mind, but prolonged deterioration in macro conditions could influence demand and financing dynamics.