Indian information technology stocks have emerged as the primary beneficiaries of a broadening reversal in the global artificial intelligence trade, with the Nifty IT index climbing 16.7% in July.
The rally coincided with a steep 21% decline in the Philadelphia Semiconductor Index, marking the most significant performance divergence between the two benchmarks since 1999, according to a July 29 note from Goldman Sachs.
The repricing reflects a strategic rotation by global investors seeking to hedge against mounting volatility in the US technology sector.
As selling pressure intensified in American AI-related equities, capital flowed into Indian markets, which have become a popular destination for funds looking to maintain exposure to the digital economy while reducing concentration risk in US tech giants.
Broader Indian equities also outperformed their global peers during the month, reinforcing the narrative that emerging-market tech services are gaining favor as hardware-centric AI investments face headwinds.
The shift underscores a growing sentiment that the benefits of the AI boom are spreading beyond the initial wave of semiconductor and infrastructure spending.