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What is the story about?
Arvind Sanger, Managing Partner at Geosphere Capital Management, says markets are misreading the Trump-Xi Jinping summit in Beijing, warning that the Iran war and rising oil prices pose a more immediate threat to global equities than investors appear to be pricing in — including to the widely-held artificial intelligence (AI) trade. "The hope that the market has is, in my opinion, largely misplaced," Sanger said.
Speaking on CNBC-TV18, Sanger said he doubts the bilateral summit will produce meaningful progress on either the Iran conflict or chip-export restrictions, two issues that have dominated investor attention heading into the meeting.
"Iran needs to keep control of the Strait of Hormuz to make sure that it has some leverage against any future actions by Israel or the US. I don't think China can guarantee anything about whether or not that will happen," he noted.
Watch the full conversation here
Trump arrived in Beijing on Wednesday, accompanied by a host of corporate executives — including Apple CEO Tim Cook, Tesla CEO Elon Musk, and Nvidia CEO Jensen Huang — signalling his top priorities for the visit, which include tech, aircraft, and agriculture. The state visit, originally scheduled for April, was postponed to May due to the 2026 Iran war.
Also Read: Panic buying in gold as duty hike hits but sales set to fall 10% this year, says IBJA
Sanger argued the diplomatic optics favour Beijing. "Trump is going with a very weak hand," he said. "President Trump is facing problems — inflation and obviously the Iran war. President Xi has his own troubles in terms of his own economy, but not in as bad a shape as the US is right now." He added that Trump needs more from this meeting than Xi does, making a transformative deal unlikely.
Trump was greeted on the tarmac by a brass band and flag-wavers, though Xi himself was not present at the airport — Chinese Vice President Han Zheng received the American delegation instead. Sanger, when asked what to read into Xi's absence at the airport, said he wasn't sure of the diplomatic significance but reiterated his broader scepticism. "I'm not counting on any great shakes," he said.
On the question of chip-export restrictions — a key sub-agenda item given Nvidia CEO Jensen Huang's presence on the trip — Sanger was cautiously optimistic but careful not to overstate the stakes. He said Nvidia would be "a single point beneficiary" if a deal allowed more advanced chips to be sold into China, but argued the broader US tech and AI rally does not hinge on the outcome.
"The AI trade is not really dependent on the China deal," he said. "That will continue on its own."
His confidence in AI adoption rests on the sector's fundamental momentum. He pointed specifically to Anthropic as evidence that enterprise demand remains robust. The Claude maker is currently in talks to raise at least $30 billion in fresh financing at a valuation of more than $900 billion — a figure Sanger cited on-air as a sign of the capex story continuing to strengthen.
Still, he cautioned that the trade is not without risk. "Nothing is ever a straight line," he said. "There are companies like Meta which are spending a lot of money and have nothing to show for it." He warned that not every hyperscaler would earn a return on AI investment, and that markets would eventually price in the divergence between winners and losers.
The bigger threat to the AI rally, in his view, is macro rather than competitive. "If there is no resolution on the Strait of Hormuz and oil prices keep climbing, then the tech rally and the AI rally could take a bit of a breather if interest rates keep rising and inflation fears keep rising," he said.
On Indian equities — where global oil disruptions linked to the Iran war have weighed on sentiment — Sanger was similarly guarded. He said Geosphere remains "somewhat cautious" about the market and has not yet seen the kind of pullback that would warrant aggressive buying.
"I think oil is going to $125 a barrel, so I don't see a reason for Indian markets to be outperforming," he said. He flagged several compounding risks: a potential strong El Niño affecting the monsoon, fertiliser cost pressures, and the risk that the government has been slow to adjust domestic energy prices to reflect a structurally higher oil environment.
"Indian investors and Indian policymakers have been counting on not taking the tough actions needed to correct demand," he said, adding that while this quarter's earnings growth was "fine," it was backwards-looking and unlikely to reflect mounting inflationary pressures fully.
He indicated Geosphere is watching for a more significant correction before adding exposure. "We're looking at opportunities to buy stuff when they pull back a lot, but we haven't seen that dramatic a pullback to make it a table-pounding buy yet," he said.
Catch all the latest updates from the stock market here
Speaking on CNBC-TV18, Sanger said he doubts the bilateral summit will produce meaningful progress on either the Iran conflict or chip-export restrictions, two issues that have dominated investor attention heading into the meeting.
"Iran needs to keep control of the Strait of Hormuz to make sure that it has some leverage against any future actions by Israel or the US. I don't think China can guarantee anything about whether or not that will happen," he noted.
Watch the full conversation here
Trump arrived in Beijing on Wednesday, accompanied by a host of corporate executives — including Apple CEO Tim Cook, Tesla CEO Elon Musk, and Nvidia CEO Jensen Huang — signalling his top priorities for the visit, which include tech, aircraft, and agriculture. The state visit, originally scheduled for April, was postponed to May due to the 2026 Iran war.
Also Read: Panic buying in gold as duty hike hits but sales set to fall 10% this year, says IBJA
Sanger argued the diplomatic optics favour Beijing. "Trump is going with a very weak hand," he said. "President Trump is facing problems — inflation and obviously the Iran war. President Xi has his own troubles in terms of his own economy, but not in as bad a shape as the US is right now." He added that Trump needs more from this meeting than Xi does, making a transformative deal unlikely.
Trump was greeted on the tarmac by a brass band and flag-wavers, though Xi himself was not present at the airport — Chinese Vice President Han Zheng received the American delegation instead. Sanger, when asked what to read into Xi's absence at the airport, said he wasn't sure of the diplomatic significance but reiterated his broader scepticism. "I'm not counting on any great shakes," he said.
On the question of chip-export restrictions — a key sub-agenda item given Nvidia CEO Jensen Huang's presence on the trip — Sanger was cautiously optimistic but careful not to overstate the stakes. He said Nvidia would be "a single point beneficiary" if a deal allowed more advanced chips to be sold into China, but argued the broader US tech and AI rally does not hinge on the outcome.
"The AI trade is not really dependent on the China deal," he said. "That will continue on its own."
His confidence in AI adoption rests on the sector's fundamental momentum. He pointed specifically to Anthropic as evidence that enterprise demand remains robust. The Claude maker is currently in talks to raise at least $30 billion in fresh financing at a valuation of more than $900 billion — a figure Sanger cited on-air as a sign of the capex story continuing to strengthen.
Still, he cautioned that the trade is not without risk. "Nothing is ever a straight line," he said. "There are companies like Meta which are spending a lot of money and have nothing to show for it." He warned that not every hyperscaler would earn a return on AI investment, and that markets would eventually price in the divergence between winners and losers.
The bigger threat to the AI rally, in his view, is macro rather than competitive. "If there is no resolution on the Strait of Hormuz and oil prices keep climbing, then the tech rally and the AI rally could take a bit of a breather if interest rates keep rising and inflation fears keep rising," he said.
On Indian equities — where global oil disruptions linked to the Iran war have weighed on sentiment — Sanger was similarly guarded. He said Geosphere remains "somewhat cautious" about the market and has not yet seen the kind of pullback that would warrant aggressive buying.
"I think oil is going to $125 a barrel, so I don't see a reason for Indian markets to be outperforming," he said. He flagged several compounding risks: a potential strong El Niño affecting the monsoon, fertiliser cost pressures, and the risk that the government has been slow to adjust domestic energy prices to reflect a structurally higher oil environment.
"Indian investors and Indian policymakers have been counting on not taking the tough actions needed to correct demand," he said, adding that while this quarter's earnings growth was "fine," it was backwards-looking and unlikely to reflect mounting inflationary pressures fully.
He indicated Geosphere is watching for a more significant correction before adding exposure. "We're looking at opportunities to buy stuff when they pull back a lot, but we haven't seen that dramatic a pullback to make it a table-pounding buy yet," he said.
Catch all the latest updates from the stock market here
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