5 days ago
Investors See Room to Trim AI Stocks After Sharp Rally
AI-related stocks have risen a lot in price.
Mihir Vora and Prashant Khemka think investors can sell part of these holdings after such a rally.
They do not believe investors must sell everything.
Khemka explained that a stock originally making up 5% of a portfolio might become 8% to 10% after rising sharply.
Selling some shares can bring the holding back to about 5% to 6%.
Both investors still believe AI could help the economy over time.
However, they are unsure whether stock prices now expect more growth than companies can deliver.
They also said diversification can help investors handle regulatory or market shocks.
Other areas they like include exchanges, healthcare, industrials, construction, power transmission and defense.
Mihir Vora and Prashant Khemka said investors may reduce positions in AI-linked stocks after their strong gains.
Khemka said a 5% portfolio allocation can grow to 8-10% after a rally and be trimmed to about 5-6%.
Both investors remain positive about AI’s long-term economic impact but question whether market expectations have outpaced business reality.
Vora warned that US growth and markets depend increasingly on AI-related spending on data centers and energy infrastructure.
The investors also identified opportunities in capital-market businesses, healthcare, industrials, construction, power transmission and defense.
- Who
- Mihir Vora of Trust Mutual Fund and Prashant Khemka of WhiteOak Capital Group.
- What
- The investors discussed trimming AI-linked stock exposure after a sharp rally, while identifying other investment opportunities.
- Where
- The discussion was reported in an interview with CNBC-TV18 and addressed US and Indian markets.
- When
- The timing of the interview and discussion is not specified in the article.
- Why
- AI-linked stocks have rallied sharply, potentially creating portfolio concentration and uncertainty about whether market expectations exceed underlying business performance.
Trim or Diversify Exposure
Continue Holding for Long-Term Growth
AI-linked stocks
Trim or Diversify Exposure
Vora plans to reduce some holdings, while Khemka recommends trimming positions that have grown too large after a rally.
Continue Holding for Long-Term Growth
Both investors continue to hold AI beneficiaries and remain positive about AI’s longer-term economic impact.
AI market expectations
Trim or Diversify Exposure
Khemka said it is difficult to determine whether stock-market expectations have moved ahead of the underlying business reality, and Vora warned that weakening AI demand could affect the broader ecosystem.
Continue Holding for Long-Term Growth
The investors still see AI-related capital expenditure, including data-center and energy-infrastructure spending, as an important source of longer-term economic growth.
Regulatory changes
Trim or Diversify Exposure
Regulatory action can hurt stocks sharply in the short term, making diversification important.
Continue Holding for Long-Term Growth
Vora and Khemka said regulatory changes in insurance could eventually improve efficiency, affordability and industry growth.
Key facts
- AI stock view
- Both investors remain positive on AI’s longer-term economic impact but see scope to reduce some exposure after the rally.
- Portfolio example
- A 5% allocation can rise to 8-10% after a strong run-up and potentially be trimmed to 5-6%.
- AI-related spending
- Vora highlighted data centers and energy infrastructure as important parts of the AI capital-expenditure cycle.
- Risk management
- Vora said diversification can help investors absorb regulatory and other market shocks.
- Capital-market opportunities
- Vora cited exchanges, brokerages and wealth managers; Khemka highlighted exchanges and capital-market intermediaries.
- Other preferred areas
- The investors mentioned healthcare, industrials, construction, power transmission and defense.
- Market outlook
- Vora said India will continue to be a stock pickers’ market.
Quotes
Prashant Khemka
Founder of WhiteOak Capital Group
“The regulator here, I believe, has taken these actions to promote growth in the industry. Time will tell.”
CNBC TV 18
“We still have a lot of it, but we'll reduce a bit.”
CNBC TV 18
Sources
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