Core Viewpoint - The recent surge in US technology stocks, particularly those associated with artificial intelligence, raises concerns about the potential formation of a market bubble, especially for Indian investors heavily exposed to US equities [1][2]. Group 1: Market Dynamics - The US market rally is increasingly narrow, driven by a small group of AI-linked mega-cap companies, with 10 US stocks each holding a market cap over $1 trillion [3]. - AI-related firms contributed nearly 80% of US equity gains in 2025, with the five largest AI mega-caps making up about 30% of the S&P 500 and 20% of the MSCI World Index, marking the highest concentration in nearly 50 years [4]. - The US technology sector now represents around 35% of total US market capitalization, with the 10 largest US companies accounting for over 20% of global equity value, indicating an extraordinary historical dominance [5]. Group 2: Valuation Concerns - The S&P 500 is trading at approximately 23 times forward earnings, suggesting one of the most stretched valuation phases since the dot-com boom [6]. - Despite high valuations, analysts argue that the US tech sector is not in a classic bubble, as some companies continue to generate strong cash flows that support their valuations [7][8]. - A Deutsche Bank report highlights that the rise in AI-driven valuations is accompanied by real earnings growth and robust profitability, contrasting with previous bubbles fueled by unproven business models [9]. Group 3: Risks for Indian Investors - Indian investors face unique risks due to their heavy reliance on US markets, with potential double-layered risks during a US market correction [10][11]. - The current market environment suggests that Indian investors should diversify globally rather than remain overly concentrated in US equities [10][12]. - Valuation opportunities outside the US appear more balanced, with Europe and Japan identified as attractive regions for investment [13][14]. Group 4: Investment Strategies - Indian investors are encouraged to diversify across developed markets like Europe and Japan, with a suggested allocation of 80% to these regions and 20% to emerging markets like Brazil [16]. - Mutual fund data indicates a growing trend among Indian investors to rebalance their portfolios towards non-US geographies, with significant growth in AUM for international funds outside the US [17]. - Experts recommend using mutual funds or ETFs for international exposure, as they provide better risk control and simpler taxation compared to direct stock ownership [21][22].

(Reuters) -Top technology companies hit fresh valuation milestones in October, as their shares climbed on expectations of robust demand for AI chips and computing infrastructure driven by the artificial intelligence boom. Nvidia’s shares jumped nearly 11% over the past month, adding about $500 billion in market value as it became the first company to reach a $5 trillion valuation. Chief Executive Jensen Huang this week announced $500 billion in AI chip orders and plans to build seven supercomputers for th ...

We recently published 13 Stocks Jim Cramer Discussed During His Historic Morning Appearance. CoreWeave, Inc. (NASDAQ:CRWV) is one of the stocks Jim Cramer recently discussed. CoreWeave, Inc. (CRWV) Is A "Builder," Says Jim Cramer spacedrone808/Shutterstock.com CoreWeave, Inc. (NASDAQ:CRWV) has placed itself as a key player in the artificial intelligence supply chain. The firm provides computing infrastructure to AI software companies. Since its IPO earlier this year, the shares have gained 192%. Cramer’ ...