AI boom similar to late 1990s internet revolution: Market expert
What's the story
Artificial intelligence is capturing market attention much like the internet boom of the late 1990s, yet the cycle has not reached a breaking point, said Adrian Mowat, Emerging Market Strategist, in an interview with Moneycontrol. In 2000, investors were backing unprofitable businesses or paying extreme multiples, he noted. Today, AI leaders remain highly profitable, with robust balance sheets and substantial cash reserves. While valuations are elevated, I do not foresee a bust on the scale of 2000-2001, Mowat added.
Investment caution
Gold's 4-year rally is still speculative
On the subject of gold, Mowat said its four-year rally is still speculative. "Gold is a greater fool asset—it offers no dividend, no cash flow, only the hope that someone else will pay more," he said. "Central banks are diversifying into non-sanctionable assets, and momentum buyers are piling in, but when flows reverse, price moves can be dramatic."
Market resilience
India will find it difficult to attract tactical flows
Mowat also emphasized that Indian firms are seasoned survivors in the market. He said these are well-managed, mature companies that can navigate around problems. However, he added until there's policy stabilization, India will find it difficult to attract tactical flows that other emerging markets are currently benefiting from.