Infosys, Wipro & TCS shares hit 1-yr low amid AI concerns over IT pack; what analysts say

Shares of Infosys Ltd, Wipro and Tata Consultancy Services Ltd (TCS) plunged to their 52-week low levels of Rs 1,265, Rs 199.50 and Rs 2,561.95, respectively, in Tuesday's intraday trade amid looming uncertainties around artificial intelligence (AI).

At close, Infosys fell 3.91 per cent to Rs 2,561.95, while TCS slipped 3.79 per cent to Rs 2,574.50. Wipro settled 2.82 per cent lower at Rs 200.15, reflecting sustained selling pressure in frontline IT counters.

Some market analysts said concerns over the potential impact of AI on traditional IT business models, coupled with global demand uncertainties and elevated bond yields, have kept near-term sentiment fragile in the sector.

Kranthi Bathini, Equity Strategist at WealthMills Securities, said, "IT stocks are currently in a downtrend. The implications of AI have been weighing on them in the short to medium term. Those who are holding these stocks can continue to do so, and as more clarity emerges, they may consider adding gradually as a contrarian bet with a medium- to long-term horizon. However, in the near term, it is better to avoid fresh exposure."

Echoing a similar view, Ravi Singh, Chief Research Officer at Mastertrust, said, "In IT, investors remain uncertain about near-term growth, particularly amid global demand concerns, rising bond yields and ongoing discussions about AI affecting traditional business models."

From a technical perspective, shares of Infosys, Wipro and TCS have slipped into the oversold zone and are trading below their 5-day, 10-day, 20-day, 30-day, 50-day, 100-day, 150-day and 200-day simple moving averages (SMAs).

On Infosys, Osho Krishan, Senior Analyst – Technical & Derivative Research at Angel One, said, "Infosys has slipped below its historical support levels, indicating a weak trend. The next potential support is placed around Rs 1,230-1,220, which could offer some cushion. Given the extreme oversold readings, a pullback relief rally is expected, with intermediate resistance seen in the Rs 1,400-1,435 range."

AR Ramachandran, part-time Sebi-registered research analyst at Tips2trades, stated, "Infosys' stock is bearish and oversold on the daily charts, with the next support at Rs 1,205. Investors should consider buying only if the stock closes above the resistance level of Rs 1,325 on a daily basis, targeting Rs 1,435 in the near term."