Infosys, Tech Mahindra, Wipro slide up to 2% as IT stocks fall for 4th straight day on AI fears

Indian IT stocks extended their losing streak amid fresh worries over AI-led disruption.
The sector index has now logged a sharp multi-session decline.
Investors remain cautious despite experts downplaying long-term risks.

What happened:
Shares of major IT companies fell up to 2%, extending sector losses to a fourth consecutive session.

Why it matters now:
Persistent fears that artificial intelligence could pressure future earnings are weighing heavily on valuations.

What changes for people:
IT investors face near-term volatility, while long-term bets hinge on how firms adapt to AI adoption.

Who is affected:
Retail and institutional investors, Indian IT majors, and employees tied to software services exports.

IT stocks deepen losses

Indian IT stocks declined again on February 16, extending a sharp selloff driven by concerns that artificial intelligence could disrupt the traditional software services model. The Nifty IT Index fell about 1% to 32,360, taking its cumulative drop to over 9% in four sessions.

The sector has been under sustained pressure after falling nearly 13% in 2025, and is already down around 15% in 2026 so far.

Heavyweights under pressure

Large-cap stocks led the decline. Infosys shares fell more than 2% to Rs 1,341, extending losses to over 10% in five days and more than 20% in a month.

Other major names such as Tech Mahindra and Wipro also traded lower, reflecting broad-based selling across the sector.

AI disruption fears dominate sentiment

Investor nervousness has been driven by concerns that rapid advances in AI could reduce demand for traditional IT outsourcing and software services. Fears are growing that automation and generative AI tools may slow revenue growth and compress margins for service-heavy business models.

Market participants say this uncertainty has overshadowed near-term fundamentals and deal pipelines.

Experts urge caution, not panic

Industry experts and analysts, however, argue that AI is more likely to act as a productivity enhancer rather than a full replacement for human-led IT services. They note that companies integrating AI effectively could eventually see cost efficiencies and improved competitiveness.

Still, they caution that the transition phase could remain painful for stock prices as earnings visibility stays weak.

What could stabilise the sector

Analysts say clarity on client spending trends, guidance updates from IT firms, and evidence of successful AI-led service offerings could help stabilise sentiment. Global macro cues, especially from the US tech spending cycle, will also be closely watched.

Bottom line:
Indian IT stocks are facing sustained pressure as AI disruption fears collide with weak earnings visibility, keeping investors cautious in the near term.

What to watch next:
Upcoming management commentary on AI strategy, deal wins, and whether sector valuations start attracting long-term buyers.