Goldman Sachs identifies 42 Indian stocks riding AI build-out

Mumbai: The absence of a meaningful AI trade in India is often cited as one reason for the relative lack of foreign investor interest in the market, particularly as AI-linked stocks have powered returns in several other major markets such as the US, Taiwan and South Korea. But beneath the benchmark indices, a sizeable pocket of Indian companies is emerging as a play on the build-out of AI infrastructure. Goldman Sachs has identified 42 such 'AI Enablers' across power, data centres and semiconductors.

Read more: Gold tumbles 4% to seven-week low as oil, dollar and yields climb

While the Nifty has fallen 12% in 2026 till mid-September, this cohort has surged about 60%. Many of these companies are small- and mid-caps in capital goods, utilities and technology hardware, which means their presence is not adequately captured by the large-cap-heavy benchmark indices.


Read more: Motilal Oswal sees 4 factors boosting risk-reward after market’s sharp fall from 2024 high, lists 27 stock picks

Valuations, though, are not cheap. Goldman Sachs said the AI Enablers trade at about 36 times forward earnings, an 85% premium to MSCI India and close to the upper end of their five-year valuation range of 28-39 times. The brokerage said that the premium largely reflects their stronger earnings growth. ET shortlisted 14 out of the 42 companies identified by Goldman on the basis of a minimum capex intensity of 20%.