Why Chris Wood is trimming Indian exposure to chase the ‘Mother of All Cycles’

The veteran market strategist is rotating capital away from Indian equities to double down on the hardware giants driving the global artificial intelligence boom.

For years, the "India story" has been the darling of global emerging market portfolios. But in the high-stakes world of international capital allocation, sentiment shifts with the speed of a microchip. Chris Wood, the influential strategist behind the "Greed & Fear" newsletter, has signaled a tactical pivot that should make local investors sit up and take notice. Wood is trimming his exposure to the Indian market to finance a aggressive bet on South Korean semiconductor titans, convinced that the AI-driven capital expenditure cycle is nowhere near its ceiling.

The logic behind this move rests on what Wood describes as the "mother of all cycles." While many market watchers have spent months questioning when the AI frenzy might hit a wall, Wood remains unmoved. He argues that falling token prices are not a signal of a bust, but rather a catalyst for a massive surge in demand. Drawing on the Jevons Paradox, his thesis is straightforward: as AI services become cheaper, usage will explode, creating an insatiable need for the memory and bandwidth that only specialized hardware can provide.

The Korean Bet

In a series of adjustments to his global long-only portfolio, Wood has moved to secure a front-row seat at the semiconductor foundry. He is injecting significant capital into SK Hynix and Kioxia, assigning each an initial 4% weighting. Simultaneously, he has increased the existing stake in Samsung Electronics by a full percentage point. For Wood, these companies are the true "picks and shovels" of the current tech gold rush, having already seen their order books swell as data centers around the world scramble to expand their compute capacity.

To fund this hardware-heavy shift, the India long-only portfolio is facing a haircut. This isn't necessarily a condemnation of Indian fundamentals, but rather a cold calculation of where the highest immediate growth—and the most dramatic capex—is occurring. By thinning out positions in local holdings, Wood is prioritizing the supply chain that sits at the very heart of the hardware arms race.

Why it matters

This rotation highlights a recurring tension for Indian investors: the choice between domestic domestic growth stories and global thematic tailwinds. While India continues to offer a compelling long-term narrative, Wood’s move serves as a reminder that global funds are often transient, chasing the specific infrastructure builds that define an era. As we track the broader market, investors should watch whether this is a precursor to a wider shift by foreign institutional investors (FIIs) who might be rebalancing their portfolios to capture the semiconductor boom.

The broader market backdrop remains volatile. With domestic headlines dominated by shifting valuation gaps in the bank sector and mixed performance across blue-chip indices, Wood’s departure from familiar Indian stocks marks a distinct shift in strategy. While the "India story" remains intact for many, the "Greed & Fear" portfolios are clearly looking beyond our borders, seeking the hardware giants they believe will define the next chapter of global industrial investment.