From TCS To Infosys: Top IT Stocks Wipe Out Rs 3 Lakh Crore In Market Value

IT Stocks Bleed: Investors are accelerating their exit from technology stocks as concerns intensify that advanced artificial intelligence tools could disrupt core segments of the global software and IT services industry.

What began as anxiety around AI’s impact on traditional tech models has now widened to fears of spillover effects on financial services, transportation and logistics. The broadening concerns triggered a sharp sell-off on Wall Street overnight, which spilled over into Indian markets on Friday.

The Nifty 50 and the Sensex both slumped more than 1 per cent at their respective intraday lows, with technology stocks leading the decline. The Nifty IT index plunged another 5.2 per cent to an intraday low of 31,422, extending its fall

to a third consecutive session and taking the cumulative three-day decline to 12 per cent.

Month-to-date, the index has dropped 15.40 per cent, marking its steepest monthly fall since March 2020, when it had tumbled 16.10 per cent.

All 10 constituents of the Nifty IT index were trading in the red. Infosys led the losses with a 6.3 per cent drop, while Coforge, Oracle Financial Services Software, TCS, HCL Technologies and Wipro each declined more than 5 per cent. Infosys, Oracle Financial Services, TCS and Wipro also hit fresh one-year lows.

The latest leg of the rout was triggered earlier this week after Anthropic, one of the emerging AI startups, unveiled a new artificial intelligence tool capable of automating tasks across legal, sales, marketing and data analytics—key revenue-generating areas for IT and software services companies.

The development revived memories of last year’s sell-off, when the launch of China’s low-cost AI model DeepSeek led to a 12.6 per cent decline in the Nifty IT index in February.

TCS, Infosys Lead Wealth Erosion

The sharp correction has wiped out substantial investor wealth. Based on intraday lows, the combined market capitalisation of the top five domestic IT companies has eroded by nearly Rs 3,11,873 crore this week.

TCS emerged as the biggest laggard, losing Rs 1,28,800 crore in market value, with its market capitalisation slipping to Rs 9,35,253 crore. The fall also pushed it to the fifth-most valued listed company from the fourth position.

Infosys has seen its market capitalisation shrink by Rs 91,431 crore following a 15 per cent decline this week. HCL Technologies has lost Rs 53,647 crore in market value over the past five trading sessions. Wipro and Tech Mahindra have also recorded declines, with their market capitalisations falling by Rs 22,762 crore and Rs 15,233 crore, respectively, during the same period.

Vinod Nair, Head of Research at Geojit Investments, said AI is bringing about a structural shift in Indian IT services by compressing timelines and automating tasks, thereby putting pressure on the traditional headcount-driven outsourcing model. He noted that routine-heavy roles could face layoffs as fewer employees would be required to deliver similar outcomes.

He added that even enterprise resource planning (ERP) implementation, recently highlighted by Palantir’s strategic focus, is now susceptible to AI-led disruption. According to him, clients are increasingly moving toward outcome-based pricing models. In the near term, AI adoption could pose challenges for deal wins and revenue growth, making close tracking of order inflows crucial.

AI Investment Surge Raises Bubble Fears

While AI is widely seen as a transformative force, the scale and speed of investments have raised concerns, particularly as returns remain uncertain. The mismatch between capital outlay and monetisation has sparked fears of a potential bubble, with some market participants drawing parallels to the dot-com bust of the early 2000s.

According to a Bloomberg report, four of the largest US technology companies have projected combined capital expenditure of about $650 billion in 2026, marking an unprecedented level of spending.

Strong US Jobs Data Dampens Rate Cut Hopes

Adding to the pressure on tech stocks, stronger-than-expected US labour market data has dampened hopes of near-term interest rate cuts by the Federal Reserve.

Data released on Wednesday showed that the US economy added 130,000 nonfarm payroll jobs in January, significantly above expectations of 70,000. Although job gains for November and December were revised slightly lower, the unemployment rate eased to 4.3 per cent from 4.4 per cent in December, below forecasts of 4.4 per cent.

The data points to a stabilising labour market at the start of 2026 and reduces the likelihood of aggressive rate cuts by the Fed in the near term. Higher-for-longer interest rates could keep funding costs elevated and weigh on global technology valuations, including those of Indian IT companies.