Sanger stated that while the intense euphoria around AI stocks has moderated — with Oracle’s stock, which has halved from its September high, serving as a “poster child” — the AI theme itself remains intact. “I don’t think it’s as black and white,” he said, pointing to Micron Technology’s strong post-market numbers as evidence that demand driven by AI continues to be robust. He argued for a “more measured approach,” suggesting that recent corrections may have created more attractive entry points for investors.
Looking ahead to calendar year 2026, Sanger said he does not expect AI to remain the single dominant market theme, a shift he believes could benefit India. “If AI remains a dominant theme, then India is the odd man out in terms of not having really sizable AI plays compared to the US or China,” he explained. However, a broadening of market focus would allow India to stand on its own growth fundamentals without relying on an AI narrative. “I suspect it’ll be a more balanced year… and that should be a benefit for India,” he added.
Sanger also downplayed the global impact of a potential Bank of Japan (BoJ) rate hike, stating that only a significantly more hawkish-than-expected commentary could trigger an unwinding of the yen carry trade. Even then, he said, “I do not see that as a key lynchpin of what happens in Japan is driving global market performance,” stating that equity markets have continued to outperform despite a gradual unwinding of the trade through the year.
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On the domestic front, Sanger expressed hope that 2026 will mark a phase of earnings acceleration for Indian companies. While India has reported strong gross domestic product (GDP) growth, it flagged the lag in corporate profitability. “We’ve seen great GDP numbers reported last quarter, but we haven’t seen that in earnings growth from the Indian companies,” he said, adding that select sectors could begin reflecting this growth more meaningfully going forward.
For the entire interview, watch the accompanying video
