Global Investors Reassess AI Trade: Could India Attract Money From Old Economy Stocks?

The recent pressure on AI stocks has raised questions about whether the global AI trade is facing a healthy correction or a deeper downturn. The trend is driven more by rising funding requirements, debt dependence and higher interest rates than by US midterm election results, says Punita Kumar Sinha, Managing Partner, Pacific Paradigm Advisors. As investors reassess expensive AI valuations, traditional sectors and old-economy markets such as India could attract renewed interest. However, opinions remain divided, with some viewing the correction as a buying opportunity and others warning of a bigger market correction. The potential shift in global investment flows could have important implications for Indian equities.