India's stock market has spent much of the recent global rally on the sidelines. According to a Yahoo Finance report carried by Google News, the main reason was simple: India lacks the big artificial-intelligence names that have driven markets elsewhere. Now, Yahoo Finance reports, that very absence is turning into an advantage.
The context is a booming market for AI-linked chipmakers abroad. According to DSP Mutual Fund, as reported by Moneycontrol, companies such as TSMC, Samsung and SK Hynix have accounted for 72% of the emerging-market rally. Because India's index is not weighted toward these AI and semiconductor giants, it did not ride that wave up.
But the same feature that caused India to lag also left its valuations comparatively modest. According to DSP Mutual Fund, among the four emerging markets with index weights above 5%, only China and India are trading below their 10-year average price-to-earnings multiples. In other words, while AI-heavy markets have grown expensive, India remains relatively cheap by its own historical standard.
That combination has led DSP Mutual Fund to frame India as a "contrarian bet" — an investment case that runs against the prevailing AI-driven momentum rather than with it.
Why it matters: the story shows how the global rush into AI stocks is reshaping where investors see value, and how a market once penalized for missing the AI boom could become attractive precisely because it sat it out.