Geosphere's Sanger: AI rally not over, but stock picking must get tighter

what happened

Arvind Sanger, Managing Partner at Geosphere Capital Management, told CNBC-TV18 that the recent slump in AI stocks is unlikely to signal the end of the AI investment cycle. He expects a period of consolidation instead, with investors becoming more choosy. In his view, clearer signals may come after the US midterm elections, especially for AI infrastructure and semiconductor demand.

Sanger listed several new risks: memory pricing shaped by developments in China, political debate over US data centre and power infrastructure, and doubts about whether AI infrastructure firms can keep funding heavy spending. Concerns around Oracle and CoreWeave have drawn attention to balance sheets, he said. He also sees opportunities beyond the AI theme, including specialised IT services, financial companies and businesses serving domestic demand in India.

On India, Sanger said geopolitics remains a key risk and warned that crude prices could climb if tensions escalate after the US midterms.

why it matters

The comments matter for markets because they span semiconductors, power infrastructure, and financials. A sharper focus on the balance sheets of AI infrastructure firms could make stocks more sensitive to borrowing and capex news, while geopolitical developments could move oil quickly and feed into Indian equities.

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