AI losing its shine? Why global investors could turn to India for their next big bet
Investors are questioning the sustainability of returns from heavy AI investments by US companies. This scrutiny may prompt fund managers to consider Indian equities as an attractive investment alternative. Recent data shows significant foreign investment inflows into Indian stocks after a selling period. Additionally, private-sector investment is on the rise, indicating a more dynamic market…
As concerns grow over the sustainability of the AI investment wave, India is positioning itself as an attractive alternative for global investors, according to Jefferies' latest report. US tech behemoths' heavy spending on AI and doubts about the sector's long-term returns may prompt fund managers to explore opportunities beyond AI stocks, the brokerage noted.
India stands to gain from this potential shift, given its relatively attractive valuations and a stronger-than-expected economic recovery. Over the past three weeks, foreign investors have poured a record $5.2 billion into Indian equities, following a wave of net outflows of $51.2 billion from the market since 2025. Lower valuations, better economic prospects, and a surge in private-sector investment, including machinery imports, further bolster India's appeal.
Meanwhile, domestic investors continue to support the market through mutual fund inflows. However, the growing supply of equities has tempered gains in benchmark indices. As investors question the returns on their AI investments, India's market could serve as a promising alternative destination.
Written by urgent.news from Times of India's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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