TCS, Infosys, Wipro shares slide as AI fears drag Nifty IT down over 4%

The Nifty IT index dipped over 4% early on February 12, gripped by a fresh wave of anxiety that artificial intelligence could disrupt traditional software and IT services businesses.

The weakness followed a steep overnight sell-off in US-listed technology stocks and IT services ADRs on fresh advances in enterprise AI tools, which raised concerns that automation could threaten existing software models, offsetting optimism from strong US economic data and spilling over into broader IT stocks.

Tata Consultancy Services

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Wipro hit fresh 52-week lows.

Ed Yardeni, President of Yardi Research. said “It was kind of like Game of Thrones… and suddenly, with AI, they're [tech companies] all competing with each other.”

He warned that heavy spending on AI infrastructure is adding uncertainty for returns in the software and large-cap technology space.

From a portfolio positioning perspective, Ashwini Agarwal, Founder and Partner, Demeter Advisor said, “Just stay away would be my sense for the moment.” He added, “When something is getting disrupted, don't stand in the way… stay away, let the chips fall where they may.”

In a note on Indian IT services, Citi said the current cycle may be structurally different from the earlier cloud transition. Unlike the shift to cloud, which created incremental work for Indian IT firms, AI could affect a wider set of services and raise incumbency risks as large IT companies are now dominant players rather than challengers.

HSBC also said productivity gains from AI may heighten pricing pressure, though it does not expect productivity improvements to exceed 15–20%.