IT stocks fall on fears of generative AI, mutual funds lose nearly ₹50,000 crore:According to ACE Equities, mutual fund investments in the top 10 IT companies, which totaled ₹3.56 lakh crore as of January 31, 2026, have declined to ₹3.04 lakh crore.

News Topical, Digital Desk : The sharp decline in IT stocks during the current month of February has raised concerns among mutual fund (MF) investors. It is believed that rapidly developing generative artificial intelligence (AI) could reduce demand for human-led coding and IT support services, a major source of income for Indian software export companies. This potential has led to a sell-off in IT stocks, leading to significant losses for mutual funds.

Loss of over ₹50,000 crore.

According to ACE Equities, the total investment of mutual funds in the top 10 IT companies was Rs 3.56 lakh crore as of January 31, 2026, which has declined to Rs 3.04 lakh crore by February 13. This is a loss of approximately Rs 50,000 crore. During this period, the highest investment is in Infosys. MF investment in it has declined to Rs 1.14 lakh crore, which was Rs 1.37 lakh crore by the end of January. This company alone has suffered a loss of approximately Rs 22,600 crore. Similarly, investment in Tata Consultancy Services (TCS) has declined from Rs 62,270 crore to Rs 53,660 crore, which is a loss of approximately Rs 8,600 crore. Investment in HCL Technologies has also declined to Rs 35,080 crore, which has suffered a loss of approximately Rs 5,800 crore. So far in February, Infosys shares have fallen 16.5%, TCS 14%, and HCL Technologies 14.2%. Losses for other companies on this list are as follows: Tech Mahindra - ₹3,900 crore Persistent Systems - ₹2,000 crore Coforge - ₹3,670 crore Mphasis - ₹1,740 crore Wipro - ₹1,231 crore.

AI tools increase pressure Recently, AI company Anthropic released several open-source plug-ins for the cloud that can automate various business tasks. This has increased the potential for impacting the business of IT service companies. Additionally, Palantir claims that its AI platform can reduce the time required for SAP system migration from years to just weeks. If this happens, IT companies' application service revenue could be impacted.

What's next? According to a Jefferies report, AI could put pressure on IT service companies' earnings over the next 1–2 years. While AI is also bringing new opportunities, uncertainty remains among investors.