Transcription
Hello friends, today we are going to talk about how some stock market stocks have become global AI boom in the world. Yes, definitely, the markets are touching new heights due to the way foreign institutional investors are investing in Taiwan and South Korea. If we talk from the point of view of market capitalization, then Taiwan has even surpassed India. If we talk about 2026, then by 2026, almost 24 billion dollars of foreign money will have exited India. So what is the reason? So I think India is lagging far behind in the AI race. And that is the biggest reason. And because of this, should Indian investors be worried? So today we will understand this topic a little bit, friends.
So if we look today, there is an AI super cycle going on in the world. Just like there was an internet boom in 2000, similarly, there is now a boom in artificial intelligence. Many such discussions are happening. And if anyone is getting the biggest benefit from this boom, then it is those countries that either make chips for AI, or control semiconductor technology, or supply data center hardware. That is why Taiwan and South Korea have suddenly become favorites of global investors. If we have to understand the story of Taiwan, then there is a company in Taiwan named TSMC. This company has become the world's most important semiconductor manufacturer. Whether it is Nvidia or AMD, almost all AI giants are indirectly dependent on TSMC. And what is the result of this? The result is that the Taiwan stock market has overtaken India in market capitalization ranking. So if I am not wrong, this company has a weightage of around 42%, 42% in Taiwan's index. So it means one company, last year if I am not wrong, there was a rally of around 49% in this one stock. So you can understand, almost, almost, if we look at the index, if there is a 42% weight, obviously it would have increased because of the rally, but close to 16 to 17% gain in the index alone is due to that particular stock running there.
If we understand the story of South Korea here, then South Korea is also catching up very fast. Companies like Samsung or SK Hynix, which are global leaders in AI memory chips, are dominating a lot in the advanced memory required for AI servers and GPUs. And that is why, after Taiwan, global money is also flowing towards South Korea. So now, if we understand the numbers a little, then global tech giants like Microsoft, Amazon, Meta, or Google, these companies are going to invest close to 700 to 800 billion dollars in 2026. How much? 700 to 800 billion on AI infrastructure. And this spending is almost 75% plus compared to last year. More than that, meaning it is higher than 75%. Meaning AI spending is literally in explosion mode. And there are some predictions that by the calendar year 2027, this spending could go up to 1 trillion dollars. So this is the result that if so much spending is happening there, then the beneficiaries will be those companies, on which these companies are directly or indirectly dependent for infrastructure. So they are getting benefited, and in emerging markets, these are Taiwan and South Korea.
So now the question is, why is India not getting that much benefit? The simple reason is because India's stock markets are mainly driven by banks, financials, pharma, consumption, FMCG, IT. These are the sectors. So we don't have much exposure to semiconductors or AI hardware. So that is why institutional investors who follow the flows, the trending trend, are going towards Taiwan and South Korea. But this does not mean that India's story is over. India is still the fastest-growing major economy in the world. India has a very strong domestic consumption story. There is a push for manufacturing here. The government's focus on the semiconductor mission is also increasing here. So many benefits, if we look from the angle of PLI schemes, all these things are happening. Vaishnav ji, our IT minister, has also said that we will soon become an important player in semiconductors in the coming few years. So if all these things happen, then definitely I think if we can get some participation in that way, then after the overvaluation of Taiwan and Korea, emerging markets can once again look towards India.
So what should investors ultimately do? So in every cycle, there is a leadership change. In 2000, there was US tech domination. After 2008, the China theme became very strong. Now an AI semiconductor cycle is running. But even from the point of view of all these themes, even if India has not been the topper in every cycle, we have been a consistent performer for a very long time. So do not underestimate that consistency. Even today, we are the world's fastest-growing economy. We should always keep this in mind, friends. So long-term, India is a long-term structural story. So that is intact. So no changes are visible there. No problems are visible in the long term. So in the future, global market leadership may go to countries that control AI infrastructure, or the semiconductor ecosystem, or dominate deep tech manufacturing. But among the consistent players who will always try to remain in the top quartile, the Indian market will always be there, at least for the next one or two decades, that is very clear, friends. So that is why we are not suggesting that everything is positive about India, but a lot, the majority, the probability, is definitely leaning towards India in the long term. So that is why your eyes should be on Indian markets. Even if South Korea and Taiwan appear to be very attractive markets in the short term, it is not necessary that that domination will always remain. Because they are dependent on a particular theme, not on the overall economy doing well. As companies, like Samsung, SK Hynix, or TSMC, these companies are doing very well. Not their economies. This is very important for us to understand, friends. So I hope this video was informative for you. Stay tuned to the channel for such videos and give me leave until the next video, friends. Jai Hind.