Indian IT Stocks Plunge 14% in Week on AI Disruption Fears

TCS, Infosys, and Wipro suffer steepest weekly fall since COVID-19 pandemic, wiping $50 billion in market value as Anthropic’s Claude Cowork raises automation concerns.

Indian information technology stocks witnessed their steepest weekly fall since the early days of the COVID-19 pandemic, wiping out nearly $50 billion in market value as investor anxiety over artificial intelligence converged with weak global cues and fading hopes of US rate cuts.

The rout gathered pace on February 12-13 after fresh fears that rapid advances in generative AI could fundamentally disrupt the outsourcing-led business models that have powered the sector for decades. The immediate trigger was the launch of new AI tools by startupAnthropic, including Claude Cowork with 11 specialized plugins for legal reviews, sales analysis, and data analytics.

TCS’s market capitalization fell below ₹10 lakh crore on February 12 for the first time since December 2020, hitting a 52-week low of ₹2,776. Infosys fell 6-7% over two trading sessions to ₹1,380.60, while Wipro declined to ₹210. The Nifty IT index dropped over 14% in seven trading days, reaching a nine-month low.

By February 13, the sector continued bleeding with Infosys falling 7%, TCS down 6%, Wipro dropping 3.85%, and HCL Tech declining 3.60%. The S&P BSE IT index shed approximately ₹1.3 lakh crore in combined market capitalization. Infosys ADRs plunged 9.4% on NYSE, while Wipro fell 4.6%.

Analysts at Jefferies dubbed this scenario the “SaaSpocalypse,” highlighting profound investor concern that AI could fundamentally undermine traditional IT business models. Motilal Oswal suggested the next 3-6 months will be crucial for observing AI partnerships that could pave the way for new service deals.