Emerging-market funds are increasingly focusing on artificial intelligence, anticipating that significant technology spending will continue to fuel returns for years. Asset managers like AllSpring Global Investments and GIB Asset Management are boosting their investments in AI stocks, spurred by the success of companies such as Chinese AI developer DeepSeek and major Asian semiconductor manufacturers. This strategy has proven profitable, with AI companies making up the six largest contributors to the rally in Bloomberg’s emerging markets stocks index this year.
Alison Shimada, head of total emerging markets equity at AllSpring, which oversees $611 billion, believes the AI trend has staying power. Allspring is a global asset management firm. Shimada noted the transformative impact of AI on local populations within emerging markets, stating, “This trend could last for the next 10 to 20 years.”
While AI investment has largely centred on Silicon Valley firms, emerging-market companies that can either leverage the technology or provide essential components are also reaping benefits. For instance, AI servers have become the primary growth driver for Taiwan’s Hon Hai Precision Industry Co., also known as Foxconn. Hon Hai Precision Industry Co. is a multinational electronics contract manufacturer.
The top contributors to Bloomberg’s EM stock index this year include Taiwan Semiconductor Manufacturing Co., Tencent Holdings Ltd., Alibaba Group Holding Ltd., Samsung Electronics Co., SK Hynix Inc., and Xiaomi Corporation. Collectively, these companies account for 37 per cent of the index’s rally, highlighting the significant impact of technology and AI-related stocks on emerging market performance.
