Stories
Indian AI Proxy Stocks Surge Amid a Weak Market
- •India's benchmark Nifty 50 index fell 13 percent in 2026, heading for its worst year since 2011, while AI proxy stocks surged.
- •Half of the top ten gainers on the Nifty 500 index are companies supplying infrastructure for the global artificial intelligence boom.
- •Optical fibre maker Sterlite Technologies skyrocketed 804 percent this year, leading the Nifty 500 performers.
- •Foreign investors and mutual funds increased their stakes in top AI-linked Indian companies despite record overall equity sell-offs.
- •Analysts warn that stretched valuations pose major risks if global artificial intelligence spending experiences any slowdown.
Key Questions Answered
Several Indian companies supplying physical infrastructure for artificial intelligence have surged in 2026. Optical fibre cable maker Sterlite Technologies skyrocketed 804% to become the Nifty 500's top performer, while telecom equipment maker HFCL, MTAR Technologies, electronics maker Syrma SGS, and generator maker TD Power Systems also saw massive gains between 123% and 287%.
Foreign investors have sold a record $32.52 billion of Indian equities in 2026 due to valuation concerns and a lack of listed companies like TSMC or Samsung that make advanced chips critical for frontier AI models. However, companies tied to data centres, fibre networks, and power infrastructure have bucked this broader downward trend.
India's data centre capacity is projected to nearly quadruple from 1.6 GW in mid-2026 to 6 GW by 2029 according to JLL, with global hyperscalers committing more than $50 billion to build 1.4 GW of capacity in the country during that period.
