Mid & Small Caps Valuations at Historical Highs, Earnings Performance Key to Market Direction

Shibani Sircar Kurian, Senior EVP at Kotak Mahindra AMC, suggests a bottom-up approach for small and midcap stocks. Despite near-term headwinds in discretionary tech spending, AI adoption presents long-term opportunities for Indian IT services. Mid and small-cap stocks are valued higher than historical averages, making earnings performance critical for market direction. Improvement in corporate earnings, particularly in H2, will justify current valuations.

The Artificial Intelligence (AI) Toolkit Market, valued at USD 22.2 billion in 2024, is projected to reach USD 151.2 billion by 2032, growing at a CAGR of 23.78% from 2024 to 2032 [1]. This robust growth is driven by increasing adoption of AI across sectors like healthcare, finance, retail, and manufacturing. Key factors contributing to this growth include the surge in demand for automated workflows, data-driven insights, and intelligent decision-making. Advancements in machine learning algorithms, natural language processing, and cloud-based AI services are also making toolkits more accessible and scalable [1].

The U.S. AI toolkit market, valued at approximately USD 6.7 billion in 2024, is anticipated to surpass USD 44.2 billion by 2032, registering a CAGR of about 23.42% [1]. Rising demand for AI-driven solutions across industries, strong government support for AI innovation, growing enterprise digital transformation, and widespread cloud adoption are fueling this market. Additionally, increased investment in AI infrastructure and skilled workforce development is driving sustained growth.

The open-source segment leads the market due to flexibility, cost efficiency, and widespread developer adoption. Well-established technologies like TensorFlow, PyTorch, and Scikit-learn provide a wealth of libraries and are updated constantly, making them perfect for startups, academic studies, and development focused on innovation [1]. The software segment dominates the market due to rising enterprise adoption for scalable AI development and deployment. Machine learning frameworks within AI toolkits empower organizations to extract insights from vast datasets, automate critical decisions, and optimize operational efficiency across various sectors [1].

North America leads the AI toolkit market, accounting for 39% of revenue in 2024. The region's dominance is attributed to robust digital infrastructure, high AI adoption rates, and the presence of leading providers like Google, IBM, Microsoft, and NVIDIA. Significant investments in AI-powered analytics, cybersecurity, and automation across healthcare, BFSI, and telecom sectors further reinforce North America's leadership in AI toolkit deployment [1].

The Asia Pacific region is projected to register the highest CAGR from 2025 to 2032, driven by rapid digitalization and broad AI implementation across industries. Countries like India, China, Japan, and South Korea are seeing accelerated adoption due to smart manufacturing, fintech growth, and e-commerce expansion. Government-led AI initiatives and increasing cloud infrastructure are fostering favorable conditions for AI toolkits to flourish in both public and private sectors [1].

Key players in the AI toolkit market include Google LLC (TensorFlow), Microsoft Corporation (Azure Machine Learning), IBM Corporation (IBM Watson Studio), Amazon Web Services (Amazon SageMaker), NVIDIA Corporation (NVIDIA AI Enterprise), Meta Platforms, Inc. (PyTorch), SAP SE (SAP AI Core), Oracle Corporation (Oracle AI Services), H2O.ai, Inc. (H2O Driverless AI), DataRobot, Inc. (DataRobot AI Platform), C3.ai, Inc. (C3 AI Suite), Salesforce, Inc. (Einstein AI), Anaconda, Inc. (Anaconda Distribution), MathWorks, Inc. (MATLAB AI Toolbox), and RapidMiner, Inc. (RapidMiner Studio) [1].

In conclusion, the AI Toolkit Market is poised for significant growth in the coming years, driven by advancements in technology, increasing enterprise adoption, and government support. The market is expected to reach USD 151.2 billion by 2032, with key segments like open-source and machine learning leading the growth.

References:
[1] https://www.globenewswire.com/news-release/2025/07/17/3117354/0/en/Artificial-Intelligence-Toolkit-Market-to-Reach-USD-151-2-Billion-by-2032-Driven-by-Enterprise-AI-Adoption-and-Open-Source-Growth-Research-by-SNS-Insider.html