AI Shockwaves Crash Nifty IT: Is India’s Tech Boom at Risk?
By Vikram Singh
Updated on Feb 13, 2026 | 4 min read | 1.03K+ views
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Quick Overview
- Indian IT stocks plunged sharply as fears about artificial intelligence disrupting traditional services triggered a global sell-off.
- The Nifty IT index slid 5.5% to 33,160.20, its lowest level in nearly 10 months, wiping out billions in market value.
- Major tech peers like TCS, Infosys, and Wipro all fell 4–7% on intensifying AI disruption worries.
- This rout signals a shift in how markets value labour-intensive IT services amid rapid AI automation.
Indian technology stocks sank sharply as investor concern about artificial intelligence (AI) supplanting traditional IT services intensified. The Nifty IT index closed down 5.5% at 33,160.20, marking its weakest point since April 2025.
All ten companies in the benchmark IT index recorded losses on February 12, with stocks sliding between 4% and 7%, erasing roughly ₹1.56 lakh crore in combined market value.
Global sell-offs in tech stocks, including a 2% slide in the Nasdaq, amplified the pressure, underlining how AI fears and macro indicators influence Indian markets.
AI adoption continues reshaping enterprise tech stacks at unprecedented speed. Companies deploy generative and agentic AI for automated coding and workflows. This evolution directly affects demand for traditional IT services. The ongoing shift places pressure on man-hour driven revenue models across the technology sector.
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Nifty IT Crashes to 10-Month Low: Key Data, Losses & Wealth Erosion Explained
Metric |
Value / Change |
| Nifty IT Closing Level | 33,160.20 (Feb 12) |
| One-Day Drop | −5.5% |
| 2026 YTD Decline (IT Index) | ~13% |
| Largest Single-Day Drops | All 10 IT constituents down (4–7%) |
| Approx. Wealth Eroded | ₹1.56 lakh crore |
| Previous 10-Month Lows | Last seen in April 2025 |
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Full Breakdown: What Triggered the Drop
AI Disruption Narrative Intensifies
- Fresh concerns emerged that generative AI tools could automate key IT services, including coding, testing, and infrastructure tasks.
- Platforms like Anthropic’s evolving AI ecosystem fanned fears of automation replacing traditional revenue streams.
Macro Signals Weigh In
- Stronger-than-expected U.S. January jobs data reduced chances of near-term Federal Reserve rate cuts.
- Higher yields and discount rate worries force reevaluation of long-duration tech valuations.
Global Tech Sell-Off Transmission
- Wall Street tech indicators, including the Nasdaq declined around 2%, contributing to risk-off sentiment.
- Asian equities followed suit, with broader markets dipping as global tech pain spread.
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Top IT Stocks Under Pressure: Who Fell the Most
Company |
Approx. Move |
| Coforge | −6.6% |
| Tech Mahindra | −6%+ |
| Infosys | −6%+ |
| LTIMindtree | −6%+ |
| TCS | −5.5–5.7% |
| Wipro | −5% |
Tata Consultancy Services also saw its market cap slip below ₹10 lakh crore after its share price hit a 52-week low of ₹2,741.
2025–2026 Outlook
Short-Term Risks
- Continued AI sentiment volatility could keep IT valuations under pressure.
- Monthly seasonal weakness historically plagues IT stocks in February, reinforcing downside risk.
Earnings Watchlist
Investors will focus on:
- Q4 guidance from major IT services firms.
- Commentary on AI strategy revenue contributions.
- Client budget direction for digital transformation vs automation tools.
Strategic Shifts
- Firms accelerating AI-oriented offerings (consulting, model integration) could regain investor confidence.
- Agencies tracking AI adoption and regulatory frameworks may shape next year’s revenue mix.
Regulatory & Macro Mix
- U.S. rate decisions and macro surprises will continue influencing sentiment.
- AI regulation debates globally could create new opportunities in compliance and advisory services.
Conclusion
AI’s rapid march into enterprise workflows is now cropping up as an investment risk, not just a growth promise. The Nify IT index’s drop to nearly a 10-month low reflects deepening market anxiety about automation’s impact on labour-intensive revenue models.
Investors and firms alike must pivot toward higher-value AI services to restore confidence. How Indian IT stocks adapt over the next quarter will define their 2026 narrative.
Frequently Asked Questions (FAQs) on AI Panic Sends Nifty IT to 10-Month Low
1. Why did the Nifty IT index fall sharply?
The Nifty IT index dropped 5.5% to 33,160.20 after investors reacted to rising AI disruption concerns that could reduce demand for traditional IT outsourcing services.
2. How much market value did IT stocks lose?
The sell-off erased approximately ₹1.56 lakh crore in combined market capitalisation as all ten Nifty IT constituents declined between 4% and 7% in a single session.
3. Which IT stocks saw the biggest decline?
Coforge, Tech Mahindra, Infosys, and LTIMindtree led the losses, each falling around 6–7%, while TCS and Wipro also recorded sharp declines.
4. What triggered the global tech sell-off?
A decline in US technology stocks, including a roughly 2% drop in the Nasdaq, triggered broader Asian market weakness and intensified selling in Indian IT counters.
5. How does AI threaten traditional IT companies?
AI tools automate coding, testing, and infrastructure management, potentially reducing billing hours and weakening the manpower-driven revenue model used by IT services firms.
6. Has the Nifty IT index underperformed in 2026?
Yes. The index has declined roughly 13% year-to-date in 2026, reflecting sustained investor concern around global tech spending and AI disruption risks.
7. Why are Indian IT firms highly exposed to US trends?
Indian IT companies generate a large portion of revenue from North American clients, making them sensitive to US tech spending cycles and market sentiment.
8. Did macroeconomic data influence the sell-off?
Stronger-than-expected US jobs data reduced expectations of early Federal Reserve rate cuts, which pressured long-duration technology stocks globally.
9. Is this the lowest level for Nifty IT in recent months?
Yes. The index touched its lowest level since April 2025, marking nearly a 10-month low during the recent trading session.
10. Can AI also create opportunities for IT firms?
Yes. Companies that expand into AI consulting, integration, and enterprise automation services may offset disruption and build new revenue streams.
11. How did the broader Indian market react?
The Nifty and Sensex also closed lower, but IT stocks underperformed significantly compared to other sectors that saw limited or selective gains.
12. What should investors monitor next?
Investors should track upcoming earnings guidance, AI-related revenue commentary, US tech spending trends, and global macro signals affecting valuation sentiment.
58 articles published
Vikram Singh is a seasoned content strategist with over 5 years of experience in simplifying complex technical subjects. Holding a postgraduate degree in Applied Mathematics, he specializes in creatin...
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