Did someone complain that our markets did not have any AI stocks (like in Korea and Taiwan) and that is the reason the FIIs are not interested here?
Well, we may not have the SK Hynix or the TSML type stocks listed here (direct semiconductor linkage stocks) but we do have some proxy plays!
And these are in the areas of AI (and allied) capex related stocks!
I have shown five stock charts of some of the big movers in recent months with all of them pointing to AI related activity being the primary trigger.
At a glance, we can see that all of them have been very strong movers in a very short period of time!
The stocks include Sterlite Tech, HFCL, Cummins, MTAR Tech and Hitachi Energy.
These are just a random selection of stocks from a list of several other names. No specific criteria was used to select the stocks, just that they have all moved big time.
None of them are to be deemed to be recommendations of any kind. These are just featured to make a point that Indian stock markets have not been devoid of winners from this ongoing AI boom that is sweeping across the world!
If SK Hynix move 1250% in two years, so has Sterlite Tech moved around 1100+%. Did you see anyone mention that?
The main point that I wish to make here is that there are enough winners around us even in this market, provided we look for them. Now, that of course, demands work. And there falter many. Most people want things served up on a platter.
That works in a bull market. But not in a market that is largely devoid of momentum, like this one is. In such markets, it is the hard work that finds these kinds of stocks.
For many, these are the kind of dream stocks that they have always wished they held in their portfolios. And, for sure, they were told by someone or the other in their circle or perhaps got mentioned in some conversation.
When the stock flares up, they suddenly remember that tip or that conversation and start regretting their inaction. Then they start extrapolating. "All I had to do was load up on this stock," and then I would have been set for the next X years, they tell themselves.
It never happens thus. Except by some extraordinary luck and that too in some raging bull market. A more realistic scenario would run thus, you heard about the stock and the story sounded convincing. And you bought some quantity (certainly no one really 'loads up'). Then when the stock went up some percentage points, you thanked your good fortune and took profits. Then you sat around and watched as the stock kept climbing and could do nothing further.
Take a look at the Sterlite Tech chart once again.
Stock could not cross the price high at 148 for over three years (2023-2026). In between, it had a rather scary drop to all time lows to around 54 levels.
Do you seriously think that you would have held the stock through such moves?
Then it stages a breakout in Feb 2026, gives you one (just one) consolidation chance to buy till April 26, and then rockets up in a whirlwind of a rise, all the way to 680 by Jun 2026.
Do you seriously think you would have caught it anywhere along the way?
It is the most natural thing for anyone to "wait for a correction" to buy. It never came!
One thing that we must never do is to take the ending and retropolate it to the beginning. This is the classic Regret Error that everyone makes time and again in the markets.
Looking at the big move, somehow you think to yourself that you would have caught stocks somewhere along the way, enough to make a few bucks.
Seldom happens.
But it is nice to dream.
Korea's SK Hynix has almost the same pattern. See chart.
Very similar multiyear consolidation near the bottom, when there was scant interest in the stock. Then, the vertical take-off in 2026! The stock probably gave a chance to enter around Mar 2026 (first circle) and the rest of the run has been a dizzying straight line. In all likelihood, Koreans are loading up on the stock now (second circle) as there are some reactions and recoveries going on. But note that the breakout was near 300 and current levels are around 2200! This is classic FOMO at work!
This is how most bubbles end. Concentrated bets in such stocks (the dream!) works when the stock is aligned well with the market trend and part of a global attention. No other time. When such bubbles break, there is no saying how they will end.
Am I saying that our Ster Tech is a bubble? Not really. The market is at a level that is 15% negative and still struggling. Its weightage in any of the indices is negligible (if at all). In comparison, SK Hynix has some 55% weightage on the Kospi and the stock has delivered 100% in a year when the market has delivered similarly. Our markets are in direct contrast to this.
But the comparisons are there and will be made. Since the Indian markets may, as a whole, have a longer runway just now compared to Korea, the reaction pull backs in Ster Tech will get bought into as it would be easy to keep the story line afloat.
The story shall repeat in other stocks in different ways. Each of them will have to be dealt with differently. That's all.
Right now, the new boy in town is HFCL. From a darling back in 2001 (Ketan Parekh's main vehicle, hit some 2500 levels) to becoming a total pariah (skidded to just 10 or so by 2004 and languished for the past 20 years! And suddenly, it is the Virtuous One.
I don't know, it may well be. Those who know its history will deal with it with scepticism but those who don't, will look at it with present eyes. Earlier people will find KP footprints all over the stock but new people will see only its positives. Who will be right? No idea. But here is a "real" chart of HFCL that one must see also.
The decent volumes throughout its sojourn at the lower levels would testify to the fact that it has always been a 'well-tipped' stock! People have been waiting forever for HFCL to go up.
Well, it is doing that now. Is this the real deal, this time? I have no idea. But, undoubtedly, the stock is in play. So, the simplest thing to do is to slap some trend-following tool and follow its diktats. See next chart of Daily HFCL chart.
We can use some such tool to remain long and exit when it signals and then re-enter when it signals again. So long as the narrative holds. Because, for sure, you will never get all the details of what is really happening!
This is one of the ways to play such runaway stocks. This way, you will not run into FOMO mode (that can be quite destructive) and at the same time, will get to participate in "hot" items.
Dong regrets what is happening overseas. Most of us don't play there. Our turf is here. There is enough game that is left here. Search them out and go for it. The right way.
Disclaimer: The views expressed in this article are solely those of the author and do not necessarily reflect the opinion of NDTV Profit or its affiliates. Readers are advised to conduct their own research or consult a qualified professional before making any investment or business decisions. NDTV Profit does not guarantee the accuracy, completeness, or reliability of the information presented in this article.
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