Indian IT stocks have demonstrated remarkable resilience with the NIFTY IT index rallying 7% over three consecutive sessions, as reported by The Economic Times and Business Standard. The latest session saw the index surge as much as 4.15% to hit a high of 31,094.45 points, building on previous gains from Thursday's closing level of 29,854.25. As of 12:51 PM IST, Nifty IT Index was the top sectoral gainer, up 1,240.20 points, or 4.15%, while the broader markets remained under pressure with Nifty 50 index declining 0.4%. All ten constituents of the index were trading firmly in the green, reflecting sustained investor confidence after months of volatility driven by global economic concerns, currency fluctuations and uncertainty surrounding artificial intelligence. The rally comes as analysts suggest the sector's worst phase may be over, with investors accumulating quality names such as Infosys, TCS, HCLTech, and Wipro after significant underperformance over the past year.
TCS shares have emerged as the top performer among Nifty IT stocks, surging 7% on Tuesday to hit a near-six-week high of ₹2,457, marking a 9% rally over the past two trading sessions as reported by The Economic Times. Infosys shares have also continued their strong performance, surging 6% on Tuesday to hit a near-six-week high of ₹1,279, marking a 10% rally in three days. Coforge advanced 4.12% to ₹1,521.40, while HCLTech shares climbed 3.67% to ₹1,239. LTIMindtree rose 3.01% to ₹4,322.60, and Mphasis gained 2.90% to ₹2,377.60. The broad-based rally reflects renewed investor confidence in the sector after months of volatility driven by global economic concerns, currency fluctuations and uncertainty surrounding artificial intelligence. In the past three sessions, the Nifty IT index has climbed as much as 6%, demonstrating sustained momentum, while from its May lows, the Nifty IT index has shown a meaningful recovery, gaining nearly 15%. According to ET Now, the Nifty IT index has staged a notable recovery in the near term, gaining 7.24% over the past week and rising 5.87% in the last one month, indicating renewed buying interest in the sector after a prolonged phase of weakness.
Deven Choksey, MD of DRChoksey FinServ, believes downside risks are limited in IT stocks as companies adapt to AI-driven, outcome-based business models. According to CNBC TV18, Choksey prefers engineering and automotive technology companies such as KPIT Technologies, Tata Technologies and Tata Elxsi, citing strong order visibility and execution prospects. He sees the potential for 15-20% upside in select names within the IT sector. From a technical perspective, Jatin Gedia from Teji Mandi noted that the Nifty IT index has given a breakout from an Inverted Head and Shoulders pattern, a widely tracked bullish reversal formation. The breakout was further confirmed by follow-through buying above the neckline during Tuesday's session, indicating strengthening momentum in the index. According to Gedia, the pattern places the IT index in a position of technical strength and points to a target range of 32,300-32,500 from the current level of around 31,050, implying a potential upside of approximately 3.5-4% in the near term. From a stock-specific perspective, Virat Jagad from Bonanza recommends fresh entries in the ₹2,420-2,445 range for TCS with upside targets of ₹2,600 and ₹2,720, while maintaining a strict stop loss at ₹2,290.
The heavy buying interest in Indian IT stocks mirrored a global rally in AI-linked shares after US-based AI data cloud firm Snowflake's robust outlook and cloud expansion plans revived confidence that corporate technology demand remains resilient despite global macro uncertainty, as reported by Business Standard. Overnight, the tech heavyweight Nasdaq Composite index touched a record high of 27,190.21 and settled at a record closing high. According to CLSA, the so-called "SaaSpocalypse" — fears that AI will hollow out demand for software-as-a-service (SaaS) platforms and the IT services companies that implement them — may be overblown. It noted that most SaaS companies have either maintained or increased their revenue and margin guidance for the upcoming fiscal year and beaten consensus earnings per share (EPS) expectations in the latest reported quarter, implying no visible negative impact of AI on SaaS demand yet. The strong performance from global technology players helped ease concerns that businesses worldwide may be cutting technology budgets amid slower economic growth.
One of the major triggers for the rally was Wipro's strong stock performance following the announcement of an expanded partnership with ServiceNow. According to CNBCTV18.com, the collaboration will focus on deploying agentic AI workflows across key enterprise functions, including information technology, human resources, procurement and cybersecurity. Under this expanded partnership, Wipro will integrate Wipro Intelligence™, its unified suite of AI-powered platforms, solutions, and transformative offerings, with the ServiceNow AI Platform, enabling organizations to streamline the initiation, orchestration, and execution of work across enterprise systems. The development received a positive response from investors both in India and overseas, with Wipro's American Depositary Receipts (ADRs) surging 18.5% overnight. Additionally, Wipro continues its acquisition strategy with plans to acquire additional stake in Aggne Global for $28.5 million, following earlier acquisitions of Mindsprint for $375 million as part of a broader $1 billion transaction with its parent, Olam Group, and purchasing select customer contracts from US-based Alpha Net Consulting LLC for $71 million.
