Despite what might seem like a risky bet or a bad idea in general to investors, given that AI is relatively new in the business landscape, Big Tech has sustained good investments and has either improved or maintained its financial performance. This can also be observed in the stock market.
“The markets have begun to sense this AI-powered shift. Analysts are picking up early signals of a strategic turn, and stock prices have started to inch upward in anticipation. Yet the real re-rating will come only when these companies can prove that intent translates into impact,” said Dr Vikas Singh, adjunct professor at the Indian Institute of Public Administration, and co-founder of Crux Management Services Pvt Ltd.
“The test will be in margins, deal composition, and the kind of projects they pursue — not in rhetoric or roadshows. Investors will look for evidence that new investments in AI partnerships, automation, and proprietary platforms are adding measurable value. If these shifts begin to reflect in profit numbers over the next two or three quarters, the market’s faith will harden into conviction. Until then, optimism remains penciled in rather than inked.”
The profits will sustain, AI will lead
“The profits driven from AI will sustain, given the magnitude of the use of AI in high-frequency trading, robotics, machine learning, etc. AI is the future. AI will drive the financial state of affairs as long as the stock market is concerned,” said professor Dhananjay Sahu, faculty of commerce, Banaras Hindu University (BHU).
“But in India, the heavy quantum of foreign institutional investment governs our stock markets. At present, it’s not a level playing field for Indian counterparts. In the US, AI is largely seen as a cost-cutting strategy, and automation is promoted. But in our country, the demography is different, and India will have to invest heavily in AI to have a level playing field,” Sahu said.
India needs better traders
Prof. Sahu believes that Indian stock traders lack certain skills, as compared to American traders. And if our traders train themselves a bit more, we can create fair and equal competition. “Stock markets in the US, I believe, are rational. The traders there are more technically sound and able than the ones here in India. In markets like the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE), people have a very fragile knowledge about the stock market, which is why Indian markets generate ‘abnormal returns’, meaning they offer returns that are over and above the average return rate.”
As an example, he said, “In AI trading, behavioural dynamics/finance aren’t often addressed. AI’s information can be ambiguous, depending on the data fed to it; AI simply can’t study the human brain. That’s why traders must be vigilant.”