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After a steep sell-off that erased nearly Rs. 1.1 lakh crore in market capitalization, frontline IT stocks such as Infosys, TCS, and HCLTech staged a sharp rebound on 24 February 2026. The major IT stocks tracked gains in global technology shares and eased concerns around disruptions caused by artificial intelligence.
The Nifty IT index rose by over 2%, with large caps leading the recovery as investors returned to the sector after days of relentless selling pressure.
The recent rout was triggered by fears that generative AI could reduce demand for traditional outsourcing services, potentially impacting the long-term revenue visibility of Indian IT companies. Weak global cues and persistent foreign institutional investor (FII) outflows added to the pressure, pushing valuations closer to their historical averages.
The immediate trigger came from a rally in US technology stocks, which lifted sentiment across global IT counters. The revenue of Indian IT companies depends mostly on their North American market, which makes them vulnerable to changes in Nasdaq performance and enterprise tech spending statements.
Brokerages and industry voices have begun to highlight that artificial intelligence is more likely to be integrated into existing enterprise systems rather than replace IT service providers. This shift in narrative has strengthened the case that large vendors will play a central role in AI deployment, modernisation, and cybersecurity projects.
The corrected data shows that multiple IT majors are currently valuing their stocks at levels that match their historical valuation benchmarks. Analysts claim that this situation triggered dip-buying because investors expect stable deal pipelines and strong cash flows to continue despite the current growth decline.
Also Read: Stock Market Today: Sensex Slumps 962 Points to 82,332 as IBM Drops 13%; TCS, Infosys Slide Over 3%
Market experts warn that the current market bounce is influenced by investor emotions. The market needs better earnings, guidance, increased discretionary tech spending, and FY27 growth forecasts to establish a lasting upward trend. The sector will continue to experience unpredictable market conditions until structural demand reaches its permanent state.
