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Market experts are closely watching a global trend that could affect how much money comes into Indian stocks. The main question is what will happen to the big wave of investments in artificial intelligence (AI). Indian stocks have not climbed as high as some other countries this year because India does not have many companies that are focused only on AI tech. 

According to a report from Cryptopolitan, Many large financial institutions have also started warning that the AI market may be in a bubble. This means prices might fall if the current excitement does not match real company growth.

Why Are Indian Stocks Not Rising Like Other Markets?

Analysts at Kotak Institutional Equities say India may become more attractive to global investors only if the worldwide AI craze slows down. Right now, a lot of investor money is flowing into AI companies. But some investors are now asking whether these companies are priced too high. 

If money moves out of expensive AI stocks, some fast-growing Indian firms might start getting more support, even if they do not yet produce strong profits.

Indian stock markets are currently quiet, as trading across Asia stays calm. Weak economic numbers from the United States and uncertainty about what the Federal Reserve will do next are making investors cautious everywhere, and this includes India as well.

But the IPO market tells a different story. According to a report from Cryptopolitan, the U.S. IPO market is seeing its busiest period since 2021, and India is also experiencing strong interest. 

Lenskart’s $821 million listing saw high demand. Another big IPO from Groww, worth $747 million, opened for bidding today.

Shares of Vodafone Idea increased by 10% after the Supreme Court said the government can review the company’s dues up to March 31, 2017. But investors are unsure how much this will really help, and the share price still stayed below the high it reached in October.

Will The AI Investment Boom Help Or Hurt India?

Company earnings in India are currently strong. Motilal Oswal Institutional Equities reported that profits rose 14%, higher than the earlier estimate of 9%. 

However, foreign investors continue to pull money out of areas that look too expensive. Morgan Stanley reported heavy selling in companies like Trent and Brainbees Solutions. 

Foreign investment funds have taken out more than $15 billion from Indian markets so far in 2025.