How could one make money in this AI-disrupted choppy market? Here's what Madhusudan Kela suggests

markets

• AI is rapidly reshaping markets, creating winners and losers
• Kela sees long-term AI opportunity but warns of job disruption
• Small-cap stocks may offer opportunities after recent corrections

Did our AI summary help?

Prominent investor and Founder and Managing Director of MK Ventures, Madhusudan Kela, said navigating today’s markets requires heightened awareness as rapid developments in artificial intelligence continue to reshape the investment landscape.

“Today, virtually everyone has a view on AI. The pace of change is extraordinary,” Kela said at News18 Rising Bharat Summit, noting that investors must remain alert as new developments emerge.

Drawing from history, he said technology has never made societies poorer, but it has always created both winners and losers. “Just as Apple emerged while companies like Blackberry and Kodak declined, a similar divergence will occur in the AI era — even within IT companies themselves,” he said, adding that adaptability will be the key differentiator.

Kela noted that AI is accelerating its own evolution, making the speed of change faster than ever before. While this presents long-term opportunity, it also raises short-term concerns, particularly around employment. “The disruption may occur faster than the workforce can retrain for new roles,” he said.

Despite this, he expressed optimism over the medium to long term, noting that India has a strong skilled labour base and the potential to evolve into a global AI solutions and application layer provider.

Reflecting on market conditions, Kela said returns have largely stagnated over the past 18 months. The small-cap index is down roughly 11 to 12 percent, while around 350 out of 1,000 companies have corrected by over 35 to 40 percent.

“Having seen multiple difficult cycles over 35 years, periods of prolonged weak returns have historically turned into strong investment opportunities,” he said.

Kela added that he currently sees potential emerging in smaller companies, but with caution. “This is not a call for indiscriminate investing,” he said, noting that large mutual funds remain structurally focused on large-cap stocks and often lack the intent or bandwidth to deploy meaningful capital into smaller firms.

“As investor interest in small caps has diminished, prices have corrected significantly,” he said, adding that the coming months could be an ideal window to build positions in carefully chosen smaller companies.

“Historically, it is in such periods of low interest and sharp corrections that the most meaningful investment gains have been made,” Kela added.