“What this means is that, effectively, we are going to have greater adoption. We are going to see more of those next phase winners come early and I think that has to be the overall reaction,” said Vivek Paul, Head of Portfolio Research at the BlackRock Investment Institute.
While initial market reactions suggested concerns about possible inefficiencies in legacy infrastructure investments, the institute believes it is too soon to draw such conclusions.
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He noted that it would only be reasonable to question the value of earlier investments if AI adoption had already reached a steady state, which is not the case. Instead, he stressed that this efficiency boost should be viewed as a catalyst for broader AI-driven changes.
Paul said, “My point would be that, in terms of the broader AI megaforce that we are talking about, this has to be an accelerator.”
BlackRock Investment believes India’s structural picture remains strong.
He acknowledges factors like growth deceleration and tariff uncertainties contributing to outflows but underscores the country’s long-term potential. India’s demographic advantage, with a rising working-age population compared to declines elsewhere, positioning it favourably for long-term investment strategies.
He advocates for maintaining an above-benchmark stance, particularly given recent market corrections.
Comparing India to China, Paul notes that geopolitical shifts, with the US and China moving in different directions, create significant opportunities for India. India’s structural prospects now appear more promising than China’s, given its demographic and economic strengths.
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