Orton sees the focus shifting from hype to tangible results as earnings season approaches. “It’s going to be very important, especially as we head into earnings season, given how much so many of these AI companies have moved, that the higher quality names that are not seeing deceleration or facing that law of large numbers, those are going to be the winners,” he said.
Orton also highlighted the growing importance of ‘AI users’—companies adopting AI to defend margins amid inflation—as a structural trend likely to shape markets in the coming years.Beyond AI, Orton believes investors should position for a more cyclical global recovery in 2026. “Leaning into cyclicity is a winning play for 2026,” he said, pointing to financials and industrials as key beneficiaries in the US, particularly firms tied to data centre construction and manufacturing.
He sees similar opportunities across emerging markets and Europe, where financial stocks remain attractive.
In India, Orton identified banking as his preferred cyclical exposure, naming HDFC Bank as his top overweight position in the financial space, with ICICI Bank also positioned for gains. He advised investors to remain patient during periods of volatility, adding, “You don’t need to chase the market as an investor. Let it come to you, but be prepared to put money to work because I think the fundamental support continued upside.”
Addressing the underperformance of Indian IT services stocks in 2025, Orton sees early signs of a potential turnaround, though he remains cautious. While he is not ready to “go all in,” he said he is considering “dipping his toe” into the sector as valuations have become more attractive. Companies such as Tech Mahindra and Infosys are beginning to leverage AI more effectively for global clients, he stated, but stressed that they must still prove their recovery before drawing meaningful investor interest.
On the consumer side, Orton said he owns Swiggy, viewing the stock as attractively priced following a difficult 2025. Despite intense competition on the ground, he believes the company’s strong credit lines and investments in higher-value offerings position it well for the first half of 2026.
Also Read: ‘Uncertainty is the only certainty in 2026,’ says Demeter’s Ashwini Agarwal
Finally, Orton pointed to strength in base metals as confirmation of resilient global growth. He described rallies in copper, aluminium and platinum as a bullish signal, with copper standing out due to its expanding role across data centres, semiconductor manufacturing and electric vehicles. “You actually have increasing demand that’s outstripping the increase in supply,” he said, citing years of underinvestment by miners. This supply-demand imbalance, he added, could make copper and the broader commodity complex a source of positive surprises for investors in 2026.
Also Read: After a long slowdown, IT recovery may finally be in sight, says Motilal Oswal analyst
For the entire interview, watch the accompanying video
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