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AI Fuels Stock Surge: Sterlite & Welspun Soar
3 Oct
Summary
- Sterlite's stock jumped over 11 times, driven by AI data centers.
- Welspun secured its largest order yet from its US subsidiary.
- Both companies are now priced as US infrastructure plays.
Sterlite Technologies, a global optical fiber cable manufacturer, has experienced a dramatic surge in its stock price, rising over 11 times from its low to Rs 955 as of October 1, 2026. This rally is largely attributed to the booming demand for AI data centers, which now constitute 21% of Sterlite's revenue, a significant increase from just 1% in FY26. North America's contribution to its revenue also rose to 54%.
Meanwhile, Welspun Corp, a leading producer of large-diameter steel pipes, has secured its largest order to date through its US subsidiary, Welspun Tubular LLC, valued at approximately USD 412.5 million. This order, combined with previous wins, has boosted its global order book to a record USD 4.7 billion. The company's operating margin has also improved to 17%.
Both Sterlite and Welspun are now being perceived by the market as American infrastructure plays. However, questions remain about the sustainability of their valuations. Sterlite's stock trades at a high PE of 208x, while Welspun's earnings were bolstered by a one-time gain of Rs 548 crore from an associate stake sale.
The upcoming September quarter results are crucial for both companies. Investors will be monitoring closely to see if Sterlite and Welspun can translate their substantial order books and market interest into profits that justify their current stock prices.
