Bloodbath in IT Stocks: NIFTY IT Crashes 10% in Two Days Amid Global Tech Selloff

IT stocks fall: Bulls in the Indian IT space found no respite as stocks fell again on Friday, February 13, while tech and software stocks in the US market fell sharply in overnight trade.

IT stocks are witnessing heavy selling pressure due to fears that new AI startups could disrupt traditional outsourcing models, potentially reducing pricing power, and displacing older service providers.

On Friday, the Nifty IT index fell 5.24% to its day’s low of 31,422.60 on the NSE in early trade.

Taking into account today’s lowest level, the IT index has fallen 10.46% from its closing level of 35,095.15 on February 11.

On Thursday, Wall Street closed in the red as investors grew concerned about the potential pitfalls of the artificial intelligence boom, including the threat of disruption to established business models and a potential rise in unemployment.

The Dow Jones Industrial Average fell 669.42 points, or 1.34%, to close at 49,451.98, dragged further down by Cisco Systems, which plunged 12% after issuing weaker-than-expected guidance for the current quarter. The S&P 500 fell 1.57% to close at 6,832.76, while the Nasdaq Composite fell 2.03% to close at 22,597.15.

A CNBC report said that some segments of the stock market have come under pressure this year following the launch of AI tools that could replicate parts of their business models—or at least reduce their margins.

Financial stocks, including Morgan Stanley, faced selling pressure amid concerns that AI could disrupt wealth management operations.As CNBC reported, concerns over AI disruption also spread to the real estate sector, sending stocks like CBRE and SL Green Realty tumbling amid concerns that high unemployment could reduce demand for office space.

What Vishal Sikka says

Amid growing concerns about disruptions caused by AI, Vishal Sikka, speaking to CNBC-TV18, said that the impact of artificial intelligence on the services sector is uneven, as change happens at a much slower pace. He said that generative AI shows a 20-30x increase in productivity, but there is still a huge gap between its full potential and current ground reality.

The founder and CEO of Vianai and former CEO of Infosys said that Indian IT firms need to move from managing the familiar to creating the unknown.

Tech Stocks Bleed on February 13- Smart Buying Opportunity

Last seen, the Nifty IT index was trading 4.21% lower at 31,764.80. All 10 stocks were trading in the red.

Among large-cap IT firms, Infosys was down nearly 5.5%, while TCS was down nearly 4.5%. LTIMindtree was down over 3%, while HCL Technologies was down over 4%. Tech Mahindra shares were down 2.55%. Wipro was down 3.42% on the NSE.