Speaking to ET Now, Orton said that while uncertainties remain around global trade negotiations, the removal of worst-case economic scenarios has significantly improved investor sentiment.
“We are removing left-tail scenarios from the table. Some of the worst-case outcomes continue to be taken away, and that is encouraging… All of this is fuel for markets to continue to move higher, and it supports my optimistic case to buy the market on weakness and continue to hold it throughout the rest of this year,” he added.
AI Companies’ Debt Not a Major Concern
Addressing concerns over rising debt issuance by AI and semiconductor firms, Orton argued that investors should focus on individual company fundamentals rather than broad market narratives.
“Most of these companies have incredibly low debt burdens overall… The majority of the hyperscalers’ balance sheets remain incredibly clean, and I do not have concerns with respect to their ability to fund and finance,” he said.Dollar Strength Could Continue to Pressure Emerging Markets
Orton believes the US dollar remains an underappreciated driver of global markets, particularly for emerging economies like India.
He said a stronger dollar has affected foreign investment flows and created headwinds for commodities, including gold and silver.
“The dollar is going to be the sleeper factor… Rupee weakness has been a key reason why foreign investors have been a little bit resistant to put money back in. Until you start to see the dollar weaken, you are going to continue to see pressure across the broader emerging market complex,” he said.
Micron Results Reinforce the AI Growth Story
Micron Technology’s latest earnings, according to Orton, demonstrate that AI-driven demand remains strong and that supply constraints could persist for several more years.
“Even the whisper numbers on the buy side were met or exceeded… You are still seeing more backlogs being added, margins being strengthened, and that is just a recipe for continued gains,” he said.
He added that investors should continue focusing on high-quality companies benefiting from strong earnings momentum.
Market Optimism Is Narrow, But Opportunities Remain
While sentiment has improved considerably, Orton cautioned that the rally is concentrated in a handful of semiconductor stocks rather than the broader market.
He also noted that increasing use of leveraged investment products could lead to greater volatility.
“Investor sentiment is very narrow… It creates opportunities, but it also means investors really need to manage risk,” he said.
Despite the concentration, Orton believes diversified exposure remains the best strategy.
“To me, that is an opportunity to own markets like India, Europe, and Japan because those are good diversifiers to that really high beta that you might have in your overall portfolio,” he said.
