Without tangible gains, the demand for AI infrastructure, such as Nvidia’s chips, would falter. He positioned higher growth driven by productivity as the only viable path for nations to escape the current “debt spiral.”
The challenge, however, is that productivity cannot be tracked in real time. Official data typically arrives with a lag through GDP releases, forcing investors to rely on indirect indicators.
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“We hope to see in 2026 probably Q2, Q3, some CEOs, some CFO coming with tangible numbers like these are the productivity gains that we have been able to achieve. So that is the key data to focus on.” he said.
Recent gains in US productivity, he argues, look similar to the rebound typically seen after economic disruptions such as the pandemic, when labour shifts across sectors tend to temporarily lift efficiency.
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On the Indian market, Lafargue believes that while it has been a popular trade, global allocators are currently finding more exciting stories in markets like China and Japan. He pointed to two factors diminishing India’s immediate appeal to international investors: a perceived lack of direct AI exposure in its stock market and a lingering view of India as a service-led economy that could be challenged by AI.
For the current year, Lafargue’s primary advice to investors is diversification, particularly on a geographical basis. “A lot of people have been over-exposed to the US market and that was the right call for many years. We think this is changing,” he advised, advocating for increased exposure to other regions, especially emerging markets.
While equities remain the core “engine of growth” for wealth creation, he also sees value in alternative strategies that play on market dispersion.
For the entire discussion, watch the accompanying video
