Indian Data Centre Stocks Bleed Amid Global AI Sell-Off; Sterlite Tech, HFCL Hit Lower Circuits

The global sell-off in artificial intelligence (AI)-linked stocks spilled over to Indian equities on Monday, dragging down shares of companies seen as beneficiaries of the data centre and AI infrastructure boom.

While India lacks listed pure-play AI companies, investors have increasingly gravitated towards data centre, networking and digital infrastructure stocks as proxies for the AI theme, given that the rapid adoption of AI applications is driving demand for data centres, connectivity and power infrastructure.

Among the biggest losers was Sterlite Technologies (STL), which hit the 5 per cent lower circuit at Rs 588.30 on the NSE. The optical fibre and network solutions provider, backed by the Vedanta Group, has surged more than 550 per cent so far in 2026, aided by strong investor interest in AI-related infrastructure plays and a recently announced $1.1 billion multi-year deal with a US hyperscaler.

Peer HFCL also hit its 5 per cent lower circuit limit at Rs 177.85. The telecom equipment and optical fibre company, another key beneficiary of rising data centre investments, has rallied over 200 per cent year-to-date.

The weakness extended across the broader AI infrastructure ecosystem. MTAR Technologies, which supplies precision cooling and power management components used in data centre infrastructure, fell more than 8 per cent despite gaining around 250 per cent this year.

The correction follows a sharp decline in US technology stocks, with the Nasdaq Composite falling over 4.5 per cent last week after Broadcom's earnings failed to meet elevated investor expectations. Although the chipmaker reported better-than-expected quarterly revenue and profit, it maintained its 2027 AI revenue guidance, disappointing investors who had anticipated a stronger outlook amid surging demand for agentic AI applications.

The unchanged guidance raised concerns that AI-related capital expenditure may not accelerate as rapidly as markets had priced in, triggering profit-booking across AI and technology stocks globally after a prolonged rally.

The sell-off comes even as India continues to attract substantial investments in AI and cloud infrastructure. Amazon plans to invest $12.7 billion in cloud infrastructure in India by 2030, while Alphabet is reportedly committing about $15 billion towards an AI infrastructure hub in Visakhapatnam. Reliance Industries' data centre joint venture signed an $11 billion agreement last year, while AdaniConnex has partnered with companies including Google and Uber to support expanding data centre requirements.

Despite the long-term growth story remaining intact, Monday's decline highlights the vulnerability of AI-linked stocks to shifts in global sentiment, particularly after their sharp run-up this year on expectations of an unprecedented AI infrastructure spending cycle.

This is a developing story...