At the same time, Booth urged caution on emerging markets as a group, largely because the US economy is already in recession. She stated that Federal Reserve Chair Jerome Powell has acknowledged net job losses and weakening momentum, and warned it would be “very naïve and premature” to assume there will be no spillover from a US slowdown into the rest of the world.
On India, Booth struck a more balanced note. She said India’s recent underperformance is less about deteriorating fundamentals and more about valuations cooling after a strong run. The long-term story, she stressed, remains intact, driven by favourable demographics and education levels that continue to set India apart from developed markets. Over time, she believes India will remain a solid investment destination, and added that a rotation of capital out of the US tech and artificial intelligence (AI) trade could support the return of foreign institutional investor flows.
Also Read: Wobble in US AI stocks may benefit India, says Geosphere Capital’s Arvind SangerBooth was also blunt about the state of the US economy beyond artificial intelligence. Outside the AI boom, she said, there is “not very much going on” in terms of broad-based economic strength. Yet AI continues to prop up not only US markets but global markets as well, making it a critical pillar for risk assets worldwide.
Also Read: Aditya Birla AMC’s Mahesh Patil lays out long-term strategy for new-age tech, quick commerce
Crucially, she warned that the nature of the AI trade has changed. While it was once supported by profits and cash flows, it is now increasingly driven by leverage and debt, making markets more vulnerable to sharp reversals. Signs of that stress are already visible, she stated, pointing to growing intraday resistance in equities and risk-off signals emerging from areas like cryptocurrencies.
For the entire interview, watch the accompanying video
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