IT Stocks Crash: TCS, Infosys, HCLTech Slide on AI Disruption Fears
NEW DELHI (TheTrendingPeople): Shares of India’s leading IT services companies witnessed a sharp sell-off on Wednesday, with Tata Consultancy Services (TCS) falling nearly 7% to Rs 2,999.90, reflecting growing investor concerns over the impact of artificial intelligence on traditional IT services.
Infosys declined 7.37% to Rs 1,534, while HCLTech slipped 4.58%. Shares of Tech Mahindra and Wipro dropped 4.52% and 3.79%, respectively.
The Nifty IT index ended the session down nearly 5.9%, marking one of its steepest single-day declines in recent months.
Billionaires’ Wealth Hit
The sell-off also impacted personal wealth. HCL founder Shiv Nadar saw his net worth fall by nearly USD 1 billion to around USD 34.9 billion, according to market estimates.
AI Tools Trigger Market Fears
According to reports, investor sentiment was further shaken after Palantir Technologies showcased a new AI tool capable of automating data migration from legacy systems—a key revenue area for Indian IT firms.
Such automation threatens services traditionally handled by entry-level engineers and support teams, raising fears of shrinking margins and reduced demand.
Global Tech Stocks Also Slide
The AI-driven sell-off was not limited to India. Several US technology and consulting stocks also declined sharply.
- Adobe fell 7.31%
- Salesforce dropped 6.85%
- Cognizant plunged 10.14%
- Accenture slipped 9.6%
- RELX declined 14.1%
- Thomson Reuters fell 15.8%
Investors are increasingly worried that AI platforms could replace large parts of software development, testing, and legal and financial analysis work.
Nvidia CEO Dismisses AI Fears
Amid growing concerns, Jensen Huang, CEO of Nvidia, played down fears of AI replacing software companies.
Speaking at an event hosted by Cisco in San Francisco, Huang said:
“Software is a tool. There’s this notion that the tool industry is in decline and will be replaced by AI. It is the most illogical thing in the world.”
He added that AI is meant to enhance tools, not replace them.
Role of Anthropic’s New Tools
Market anxiety has also been fueled by new AI products from Anthropic, including its Claude Cowork platform.
These tools claim to automate tasks such as:
- Legal document review
- Financial modelling
- Data analysis
- Sales and marketing research
Analysts told Reuters that Indian IT companies could be particularly vulnerable, as many of these tasks are currently handled by junior-level employees.
Impact on Indian IT Sector
Experts believe that while AI will create new opportunities, it could disrupt traditional outsourcing models in the short term.
Key concerns include:
- Reduced demand for basic development work
- Pressure on operating margins
- Need for large-scale reskilling
- Higher investment in AI platforms
Industry leaders are now under pressure to accelerate their shift toward high-end digital and AI-led services.
The sharp fall in Indian IT stocks reflects growing investor anxiety over rapid advances in artificial intelligence and automation. With global tech companies rolling out powerful AI tools, traditional IT services firms are facing renewed scrutiny over their long-term business models.
While leaders like Jensen Huang remain optimistic, markets appear unconvinced in the near term. How quickly Indian IT majors adapt to the AI era will determine their future growth and investor confidence.
Our Final Thoughts
The current sell-off highlights a major transition phase for the IT industry. AI is no longer just a support tool—it is becoming a core disruptor. Indian IT firms now face the challenge of reinventing themselves beyond cost-based outsourcing.
Those that successfully move up the value chain into AI-driven consulting and innovation may emerge stronger, while others risk being left behind in a rapidly changing digital landscape.