Nifty IT drops over 7% as investors fear AI automation
IT stocks have taken a hit this month, with the Nifty IT index down more than 7% and big names like TCS, HCL Tech, Wipro, and Tech Mahindra dropping 5% to 10%.
After two months of consecutive buying, investors are now worried that new AI tools from companies like OpenAI, Google, and Meta could automate traditional tech services, making them less valuable and putting old business models at risk.
Brokerages downgrade TCS and Infosys
Recent AI launches are getting smarter and cheaper, which could help Indian IT firms find new ways to earn.
But brokerages are cautious: some have downgraded major players like TCS and Infosys.
UBS says AI revenue is still too small to fully compensate for potential deflation in legacy services.
The message is clear: IT companies need to adapt fast if they want to ride the AI wave without getting left behind.