Beyond Vedanta: The other Anil Agarwal stock that just exploded 500% on AI boom
The artificial intelligence boom is no longer confined to global technology giants. In India, it is creating a different set of stock market winners: optical
The artificial intelligence boom is no longer confined to global technology giants. In India, it is creating a different set of stock market winners: optical fibre manufacturers. No company has captured investor imagination more than Vedanta-backed Sterlite Technologies. The stock has surged an astonishing 500% in 2026, turning into one of the market's standout performers. The rally has translated into a dramatic wealth creation story, with the company's market capitalization swelling from just over Rs 4,000 crore at the start of the year to around Rs 30,000 crore in six months.At the centre of this theme is a simple reality. As AI adoption accelerates worldwide, the need for high-speed connectivity infrastructure is rising sharply, and optical fibre is emerging as a critical building block of that ecosystem.While multibagger returns in a short span are not uncommon in Indian markets, a 500% gain in six months probably is.Why Sterlite Tech rallied the way it did?The country's data centre industry is entering a prolonged expansion cycle, supported by accelerating digitalisation, rising cloud adoption and growing demand for artificial intelligence infrastructure. According to international brokerage Nomura, India's data centre IT load has increased from around 350 MW in 2019 to nearly 1.5-1.6 GW in 2025, representing a CAGR of about 29%, significantly ahead of the global growth rate of roughly 20%. Consequently, India's share of global data centre capacity has climbed from around 1.5% in 2019 to approximately 2-3% in 2025.The opportunity extends far beyond India.
Globally, hyperscalers are ramping up investments in AI-focused data centres, creating strong demand for optical fibre cables, interconnect solutions and telecom infrastructure. As AI workloads become increasingly complex and compute-intensive, the need for faster and denser connectivity within and between data centres continues to grow, directly benefiting companies such as Sterlite Technologies.India's own data centre opportunity is adding further momentum. A KPMG report projects the country's data centre industry revenue to reach nearly $45.69 billion by 2033, driven by rising AI workloads, rapid cloud adoption and data localisation requirements. "With one billion internet users and businesses rapidly adopting cloud services, building domestic data centres is now a necessity," the report noted.Can you still join the party?Despite the extraordinary rally, some brokerages believe Sterlite Technologies may still have room to run. Hong Kong-based CLSA estimates the stock could gain another 13% (target of Rs 655) from current levels. The optimism follows a major $1 billion order win from a U.S. hyperscaler, which analysts believe materially strengthens the company's position in the AI data centre ecosystem while improving visibility on medium-term growth.CLSA expects the order to reinforce Sterlite's competitiveness in international markets and is now modelling a 49% EBITDA CAGR between FY26 and FY29. The brokerage continues to maintain an "Outperform" rating on the stock.Valuations a concern?"While valuations look stretched, with STL trading at relatively higher valuations, there are still some structural gains for the next 3-5 years, provided a healthy correction comes first," said Ravi Singh of Master Capital Services.Santosh Meena, Head of Research at Swastika Investmart, echoed a similar view.
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