IT stocks extend slide as AI disruption concerns persist; Nifty IT down 11.5% in three days

IT stocks remained under heavy selling pressure for a third straight session, with the Nifty IT index currently down 4.70% to 31,600.95.

The index has declined 11.54% over the past three trading sessions as concerns over AI-led disruption continue to weigh on sentiment.

The weakness follows heightened investor anxiety after US-based artificial intelligence startup Anthropic introduced a tool targeted at corporate legal teams. The company, known for its Claude chatbot, said the platform can automate contract reviews, compliance workflows, legal brief preparation and other routine functions, raising concerns about the long-term implications for outsourcing-driven IT business models.

Among frontline stocks, Infosys dropped 6.18%, while Coforge fell 5.49% and Oracle Financial Services Software declined 4.95%. Tata Consultancy Services lost 4.80%, and HCL Technologies slipped 4.55%. Wipro fell 3.91%, LTIMindtree declined 3.85%, and Mphasis shed 3.37%. Tech Mahindra and Persistent Systems each dropped 3.08%.

 

The sector has also been pressured by stronger-than-expected US economic data, which has reduced expectations of near-term rate cuts by the Federal Reserve, adding to caution toward export-oriented technology stocks.

Market opinion remains divided on AI's long-term impact. One view suggests automation could structurally challenge labour-intensive models such as IT services and BPO by compressing timelines and reducing headcount intensity, potentially affecting demand dynamics over time. Another perspective argues the disruption narrative may be overstated, with software and technology firms seen as well placed to embed AI into their platforms, expand addressable markets and unlock new growth opportunities.

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