Global capital is hunting for shelter from the overcrowded artificial intelligence trade—and Dalal Street is taking the cash.
Foreign institutional investors pumped ₹38,971 crore into Indian equities as rallies across North Asia began to stutter, providing domestic bourses with fresh liquidity while Wall Street grappled with stretched valuations. For months, emerging-market gains stayed tightly bottlenecked inside Taiwan and South Korea, where chipmakers shouldered the bulk of offshore inflows. That dynamic is now splintering. Global asset managers are searching for broader geographic exposure, and India stands at the front of the queue, according to Matt Orton, Chief Market Strategist at Raymond James Investment.
"It's never going to be a straight, linear line upward," Orton said, addressing the recent volatility battering high-flying technology balance sheets. Rather than an outright collapse, Orton views the tech pullback as a forced correction driven by sky-high earnings bars and shifting political dynamics in the United States. The easy phase of the trade is over. Investors now face the unforgiving task of tracking the second derivative of corporate balance sheets—weeding out businesses where earnings growth is quietly decelerating from those where momentum is still speeding up.
The market reaction has been swift. Traders trimmed exposure across semiconductor bellwethers after quarterly reports failed to clear near-impossible valuation hurdles. Yet Orton dismissed concerns that regulatory scrutiny or supply frictions surrounding Nvidia Chief Executive Jensen Huang threaten the broader technological buildout. Smuggling rings funneling advanced chips into China and the steady cloning of frontier models underscore how aggressive underlying enterprise demand remains.
But Orton is refusing to chase runaway valuations. Instead, he advises investors to hold off until markets establish firm support, recommending opportunistic positioning in two critical hardware and software niches: cybersecurity and memory chips. Data center infrastructure commitments are already locked under formal permits and contracts through at least 2028. The compute capacity must be built. The enterprise software must be defended.
That discipline extends directly to Raymond James' playbook for Mumbai. Orton remains constructive on Indian financial powerhouses, established technology counters, and consumer-facing retail franchises—provided traders accumulate on price weakness rather than chasing intraday momentum. With ₹38,971 crore already absorbed across Indian trading desks, institutional allocators are waiting for Dalal Street to flash clear stabilization signals before deploying the next tranche of long-term capital.