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News Topical, Digital Desk : Indian IT stocks continued to sell off for the fifth consecutive session on Tuesday. The Nifty IT index fell 3.68% at around 11 am. This comes as persistent concerns about problems posed by artificial intelligence continue to weigh on investor sentiment. The renewed concern comes after Anthropic claimed that its cloud coding tools could significantly reduce the cost and complexity of modernizing legacy software systems.
Business structure may change
The current decline in IT stocks follows growing global concerns about AI-driven automation. Anthropic recently claimed to automate legacy software modernization, a key revenue area for traditional IT services firms. This development has further fueled fears that AI could structurally alter the industry's business mix.
How much fall in which stock?
- HCL Tech – 4.50%
- Tech Mahindra – 4.18%
- Infosys - 3.68 percent
- LTIMindtree – 3.60%
- TCS – 2.94 percent
- Wipro – 2.28%
IT stocks downgraded
Recently, Jefferies downgraded several IT stocks, warning that artificial intelligence could structurally shift the sector toward consulting and implementation work, while managed services could decline.
Jefferies downgraded Infosys and HCL Technologies to 'hold' and cut their target prices by 31% and 26% to Rs 1,290 and Rs 1,390, respectively.
What is the rating for TCS?
Jefferies also downgraded Tata Consultancy Services, LTIMindtree, and Hexaware Technologies to "underperform," cutting target prices across the sector by 28-33%. The brokerage said that despite a decline of up to 16% so far this year, many IT stocks still have more downside potential than upside.
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