IT stocks slide as AI concerns deepen after Nvidia announcements

Shares of major information technology companies came under pressure on Tuesday, dragging the sector lower as fresh concerns emerged over the pace of disruption from artificial intelligence.

Stocks such as Infosys, TCS and Wipro declined, with some counters falling as much as 6 per cent in intraday trade. The sell-off followed announcements by Nvidia around new AI systems and chips, which have intensified worries about the long-term demand for traditional IT services.

Investor sentiment has remained fragile in recent sessions, and the latest developments have added to uncertainty around the sector’s growth outlook. Analysts note that advances in AI could automate parts of the services currently delivered by Indian IT firms, raising questions about revenue visibility and margins.

The pressure on IT stocks also comes at a time when investors are awaiting cues from the US Federal Reserve. Given the sector’s dependence on North America for a significant share of its revenues, any shift in the global economic outlook could have a direct bearing on demand.

Broader market weakness has compounded the decline, with IT stocks emerging among the key drags on benchmark indices through the session. While valuations have corrected in recent weeks, market participants appear reluctant to take fresh positions amid elevated uncertainty.

For now, the sector is likely to remain sensitive to global technology developments and signals from overseas markets, with volatility expected to persist in the near term.