India’s Proxy AI Stocks Surge Despite Market Downturn
What Happened
Reuters reported that while India’s Nifty 50 index fell 13% this year, marking its worst performance since 2011, a handful of AI‑linked infrastructure stocks surged. Sterlite Technologies rose 804%, becoming the top performer in the Nifty 500 index. Other gainers included HFCL, MTAR Technologies, Syrma SGS, and TD Power Systems, each rising between 123% and 287%. Analysts from Nomura cited a “supercycle” in optical fibre demand driven by data centre expansion and constrained supply. Fund managers noted that India lacks direct AI chipmakers like TSMC or Samsung, so investors are turning to companies providing power, fibre, cooling, and data centre infrastructure. Despite foreign investors selling a record $32.5 billion of Indian equities in 2026, these proxy AI trades have bucked the trend.
Key Takeaways
India’s AI proxy stocks highlight investor appetite for infrastructure supporting AI growth, even as the broader market struggles. The rally underscores both the scarcity value of AI exposure in India and risks of lofty valuations.