UAE investors look beyond AI stocks: 6 opportunities attracting interest

Dubai: For UAE investors holding global stocks, the latest selloff in artificial intelligence-linked companies raises a question: where can they find opportunities without depending heavily on a handful of technology giants?Fund managers are looking towards emerging markets, where lower valuations, higher dividend yields and businesses less exposed to AI spending are attracting interest..Get updated faster and for FREE: Download the Gulf News app now - simply click here..The selloff exposed the concentration of emerging-market benchmarks. South Korea's SK Hynix and Samsung Electronics, together with Taiwan Semiconductor Manufacturing Co. (TSMC), account for almost 30% of MSCI's main emerging-market index.

Their declines pushed the benchmark to a seven-month low on Friday before it recovered. The index trades at around eight times expected earnings, less than half the S&P 500's multiple, while offering roughly twice the dividend yield, Bloomberg-compiled data show. Its low valuation partly reflects sharply higher earnings forecasts for AI companies."Many non-tech sectors and markets in EM offer stronger long-term growth than their US counterparts, at significantly more attractive multiples," Maxence Visseau, Chief Investment Officer at Dubai-based Arkevium Capital, told Bloomberg.

Here are six areas attracting investors seeking alternatives to AI-heavy portfolios.1. India: An alternative to AI-heavy Asian marketsIndia is attracting investors seeking to reduce exposure to semiconductor stocks. Its NSE Nifty 50 rose 2% on Friday, completing its strongest week since 2021, while several other Asian markets declined.

Foreign equity inflows were on course for a weekly record, despite Indian stocks trading at higher valuations than many emerging-market peers."The no-brainer anti-AI trade should be India," said Bing Yuan, a fund manager at Edmond de Rothschild who recently increased her exposure."If you want to switch out from AI, it should be a candidate," she told Bloomberg.

For UAE investors holding Indian equities, the distinction is between domestic-market exposure and technology companies facing potential disruption from AI. Yuan remains cautious about India's IT services sector, while relatively expensive valuations present another consideration.2. China and Hong Kong: Dividend-paying stocksSome fund managers favour Chinese and Hong Kong-listed companies offering higher dividends rather than rebuilding technology positions.

Sat Duhra, a portfolio manager at Janus Henderson Investors, said he had been adding higher-yielding shares, citing "improving payout discipline"."Just hogging three or four names and being really concentrated actually doesn't work over the long term," Duhra told Bloomberg."There's a whole bunch of other areas outside of AI that have worked really well, and that's where we positioned."For UAE investors seeking income, dividend-paying businesses offer an alternative to companies valued primarily on future earnings expectations. Dividend sustainability and share-price movements remain important when assessing returns..AI stocks keep selling off. Here’s what is making investors nervous.3. Chinese healthcare: Growth beyond technologyHealthcare companies are attracting investors looking for growth outside the semiconductor industry.

Yuan holds Chinese healthcare businesses including BeOne Medicines and Wuxi Biologics Cayman. BeOne has gained 37% in 2026, while Wuxi Biologics has advanced 58%, according to Bloomberg.

Their performance shows that strong returns have extended beyond AI stocks. For UAE investors, healthcare offers exposure to pharmaceutical development and industry-specific demand, although substantial gains also mean higher entry prices for new buyers.4. Latin America: Banks, utilities and minersLatin American equities are attracting investors seeking lower valuations and exposure to commodities, financial services and infrastructure.

Malcolm Dorson, Senior Portfolio Manager at Global X Management, said he had been increasing allocations to copper and gold miners, utilities and banks."Latin America is another region that presents minimal AI exposure, deep value, and commodities," Dorson told Bloomberg."Brazil's volatility has left it with an extremely low bar for outperformance."Brazilian shares fell sharply following President Luiz Inácio Lula da Silva's unexpected re-election over Flavio Bolsonaro, who was viewed as more market-friendly.

For UAE investors, mining shares offer commodity-related exposure, although returns also depend on production costs and company performance. Banks and utilities introduce different earnings drivers alongside political and economic risks..Where are UAE residents parking their savings and why.5. Consumer goods and telecoms: Beyond AI spendingConsumer businesses and telecommunications companies are another focus for fund managers reducing technology exposure.

Robert Naess, a portfolio manager at Nordea Investment Management, has been shifting investments into these sectors. His purchases include Chinese sportswear manufacturer Anta Sports Products and Taiwanese computer hardware company Getac Holdings."I believe AI will have a major impact on the global economy, but that does not necessarily make AI stocks the best investments going forward," Naess told Bloomberg.

For UAE investors holding technology-heavy international funds, these businesses offer exposure to different sources of revenue. Their performance still depends on consumer demand, competition and operating conditions.6. Central and Eastern Europe: Financial stocksBanks and financial companies in Central and Eastern Europe are also attracting attention for their valuations and lower direct exposure to AI infrastructure spending.

Fund managers see opportunities in businesses whose earnings depend more on domestic economic conditions and financial activity than semiconductor demand.

For UAE investors seeking wider geographical diversification, the region provides another source of financial-sector exposure. Currency movements, interest rates and local economic conditions remain important considerations.

What UAE investors should considerThe recent turbulence highlights why a fund's underlying holdings matter as much as its geographical label. An emerging-market fund can appear diversified while remaining heavily exposed to a few semiconductor companies.

Investors comparing international funds can examine their largest holdings, sector allocations, valuations and dividend policies to assess concentration.

Currency exposure also matters. Because the UAE dirham is pegged to the US dollar, movements in other currencies can affect returns when overseas investments are converted back into dirhams.

Emerging markets carry their own risks, including political uncertainty and regulatory changes. Recent disruptions in Turkey, Indonesia and Brazil demonstrate that avoiding AI stocks does not eliminate volatility.

For UAE investors, the opportunity is not simply to replace technology shares. It is to assess whether their portfolios offer genuine diversification across companies, sectors and markets rather than relying on the same handful of AI-linked stocks..Make Gulf News your preferred news source on Google and stay ahead of the curve