Infosys Ltd., Tata Consultancy Services Ltd., and Wipro Ltd. and other information technology stocks sunk during early trade on Friday, extending the selloff in the IT pack to a third day. The Nifty IT index representing 10 largest companies fell 5.2% after market open, recording a third consecutive session of declines.
On Thursday, the tech-heavy Nasdaq 100 Index dropped 2% and posted its fifth day with a loss of at least 1% in the past 10 days, Bloomberg reported. “Software stocks are now trading like banks in 2008,” said Nick Ferres, chief investment officer of Vantage Point Asset Management in Singapore, told the news agency, referring to the global financial crisis.
The New York-listed shares of Wipro and Infosys, called ADRs, fell sharply.
Moshe Katri, managing director of investment banking at Wedbush Securities, told NDTV Profit that IT companies are going through a “doomsday” phase as the world in now in the third year of a 10-year GenAI cycle. “I believe the IT selloff is little overdone. We may see some decoupling of revenue from headcount in IT companies.”
The deep correction in information technology stocks is being driven largely by AI-related fears rather than fundamentals, according to multinational brokerage JPMorgan. As a strategy, analysts recommends a barbell approach — investing in both high-risk and no-risk assets and avoids mid-range risk options —focused on deep-value large caps, with overweight calls on Infosys Ltd., Tata Consultancy Services Ltd., Persistent Systems Ltd, and Sagility Ltd.
The brokerage said IT services firms will continue to play a critical role as the “plumbers of the technology world”, even as agentic AI expands its ability to write more software and automate complex tasks. Indian software exporters have been at the heart of the economy’s services sector.
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