New Delhi, Nov. 8 -- The unraveling of the AI trade after the US midterm elections is forcing investors to rethink their Asia playbook, reviving demand for out-of-favor Chinese and Indian stocks as well as companies poised to benefit from easing inflation and trade tensions.

Aberdeen Investments favors markets powered by stronger domestic growth, including India and Vietnam, and sees upside in Chinese technology firms. Hedge fund Lotus Asset Management is long Hong Kong equity futures, while Allianz Global Investors is looking at healthcare and consumer companies.

Asia has been among the hardest hit by the market fallout from the Democrats' sweep of Congress. Many of the region's biggest stocks - from Samsung Electronics Co. and SK Hyni...