Stories
Investors Advised to Trim AI Stocks After Sharp Rally, Diversify Portfolios
- •Mihir Vora of Trust Mutual Fund and Prashant Khemka of WhiteOak Capital Group suggest trimming AI-linked stock exposure after significant gains, despite long-term positive AI impact.
- •Vora plans to reduce some AI-benefiting holdings, including power transmission companies, while Khemka advises trimming positions back to initial allocation percentages to reduce concentration.
- •Both investors remain positive on AI's long-term economic impact but caution on stock market expectations potentially outpacing business reality.
- •Diversification is crucial to absorb regulatory shocks, with Vora highlighting its importance in managing risks across portfolios.
- •Capital-market businesses, healthcare, and industrials remain attractive sectors, with Vora favoring commodity exchanges and Khemka seeing opportunities in monopolies/duopolies.
Key Questions Answered
Investors like Mihir Vora and Prashant Khemka suggest trimming AI-linked holdings following their sharp run-up, which can cause an allocation to swell significantly without any fresh investment. While they remain positive on the long-term economic impact of artificial intelligence, reducing positions helps manage portfolio concentration risks and lock in gains after a rapid rally.
According to Mihir Vora of Trust Mutual Fund, maintaining a well-diversified portfolio prevents over-concentration and equips investors to absorb sudden regulatory shocks. He noted that regulatory changes often aim to improve industry efficiency and pass benefits on to customers, which can ultimately help expand the broader market.
Fund managers continue to see attractive opportunities in capital-market intermediaries like exchanges, brokerages, and wealth managers as household savings grow and financialise. Vora favors power transmission, defence, industrials, and construction, while Prashant Khemka highlights healthcare, capital-market intermediaries, and selected industrial businesses as key investment areas.
