Infosys at 3-year low on AI disruption fears, geopolitical situation

India’s leading software services company Infosys Ltd. fell almost 3% to ₹1,215 on Nifty50, marking the lowest level since April 2023 on Artificial Intelligence fears and rising crude oil prices which could prompt an halt to the rate-cutting cycle by central banks across the world. The stock closed at ₹1,234 or 1.35% lower.

Infosys was not alone as Oracle, Wipro and Persistent systems fell about 2% on Tuesday with the overall NiftyIT index sliding almost 1%.

U.S.-based AI firm Anthropic has been consistently releasing multiple updates to its AI tool Claude with features and plug-ins that can perform tasks such as writing equity research reports, legal reports and even market research reports in addition to coding and creating new applications without human intervention.

This has stoked fears among Indian IT employees and inventors alike on potential job losses and hiring cuts. Some IT majors have also started focusing on increasing productivity with TCS CEO Krithivasan saying the company was not worried of cannibalisation of revenue coming from AI adoption.

However, some industry veterans opine the IT stock sell-off was an overreaction and that Anthropic would not spell a doomsday.

The uncertainty regarding the growth and the sustainability of AI is keeping investors low on optimism.

Speaking on the Nifty IT index meltdown at the Morningstar Award, CIO of PPFAS AMC Rajiv Thakkar said a further correction in IT stocks may make the valuations attractive, subsequently making them an attractive pick.

“Agentic AI remains a developing theme, with implications still being debated rather than operationalised at scale. In the near term, this shows up as caution, longer decision cycles and selective pressure on base business. Over time, it could contribute to a broader reshaping of value pools, but the timing and magnitude remain uncertain,” according to a Kotak Institutional Research note.