Infosys, Tata Consultancy Services, Wipro, HCL Technologies and other IT stocks are likely to remain under pressure on Friday after witnessing a sharp sell-off in the previous session. Concerns around Artificial Intelligence (AI)-led disruption and weak sentiment across global technology stocks continue to weigh on the sector.
The Nifty IT Index plunged 5.5% in the previous session, led by sharp declines in Coforge, Tech Mahindra, Oracle Financial Services Software and Infosys. The index has fallen nearly 7% over the past week and is down about 13% so far this year, reflecting sustained selling pressure.
Overnight weakness in global markets, particularly on Wall Street, is expected to further dent sentiment for Indian IT stocks. On the New York Stock Exchange, Infosys ADRs tumbled 9.84%, while Wipro ADRs declined 4.6%, mirroring the broader sell-off in US technology shares.
On Thursday, the Philadelphia SE Semiconductor Index fell 1.6%, while all “Magnificent Seven” stocks ended in the red. Apple stock price plunged 5%, Nvidia stock price slipped 1.61%, AMD shares dropped 3.58%, Amazon share price fell 2.25%, Microsoft declined 0.63%, and Meta Platforms shed 2.82%.
Cognizant slumped 7.16%, Accenture declined 3.66%, while Cisco Systems plunged 12%.
Why are tech stocks under pressure?
US technology stocks have been facing sustained selling pressure amid growing concerns over whether massive AI investments will generate adequate returns. Investor worries have intensified after recent Big Tech earnings, which highlighted aggressive capital expenditure plans.
Amazon, Google, Meta and Microsoft are collectively expected to spend nearly $650 billion on AI-related investments as they race for dominance in the rapidly evolving technology landscape. The scale of spending has revived fears around margin pressure, uncertain monetisation timelines, and potential disruption across the global software and services ecosystem.
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