After a brutal sell-off in the past few sessions, owing to AI-led disruption risks, the Indian IT stocks showed recovery in the early trade on Tuesday, February 17. The NIFTY IT index surged 2.31%, with all 10 constituents trading in the green. The top gainer on the IT index was Infosys 4% following the company’s announcement of a strategic partnership with artificial intelligence firm Anthropic. The collaboration, aimed at leveraging advanced AI capabilities, pushed Infosys stock to around ₹1,407, up ₹41.10 (3.01%) during the trading session.
The announcement comes just days after Anthropic opened its first India office in Bengaluru, signaling the firm’s growing focus on the Indian market. Dario Amodei, CEO and co-founder of Anthropic, noted, “There's a big gap between an AI model that works in a demo and one that works in a regulated industry – and if you want to close that gap, you need domain expertise." This highlights the importance of combining strong industry knowledge with AI technology.
Investors appear confident that Infosys’ experience in managing complex client requirements, combined with Anthropic’s AI tools, could open new growth opportunities. The rally was not limited to large-cap companies; several mid-cap and small-cap IT firms also posted gains.
Sector Challenges Amid AI Concerns
The Infosys rally comes during a broader challenging phase for the Indian IT sector. On Monday, February 16, shares of IT majors including Tata Consultancy Services (TCS), Wipro, and Infosys itself fell again, marking the fourth consecutive session of losses. The Nifty IT index dropped 1.1% in intraday trade and has declined 9.5% over the past four sessions. From its record peak of 41,530.3 in December 2025, the index is now down 32%, its steepest drawdown since the 2008 Lehman crisis. Analysts attribute the sustained weakness to growing concerns that rapid advances in AI could disrupt the traditional outsourcing-led business model of Indian software services firms, potentially affecting future earnings growth.