Infosys, TCS, TechM, other IT stocks tumble up to 7% on fresh AI concerns after US jobs data

IT stocks plunge

• Indian IT stocks fell sharply, Nifty IT index down 5.5 percent to 33,160.20
• AI disruption fears and US jobs data drove declines in major IT companies
• Coforge, Tech Mahindra, Infosys, TCS, and others dropped over 5 percent each

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The shares of Indian IT companies tumbled in trade on February 12, accompanying Wall Street peers after better-than-expected January jobs report failed to boost investor sentiment amid concerns around AI-led disruptions.

The sharp fall in the share prices pushed the Nifty IT index down 5.5 percent to close at 33,160.20, the lowest level seen by the stock since April 17 last year.

After falling around 13 percent in 2025, the index has declined about 13 percent so far in 2026, due to intensifying fears about artificial intelligence-driven disruption that could drag the earnings of software services companies.

Coforge shares plunged 7 percent, while Tech Mahindra and OFSS shares tumbled more than 6 percent each. Heavyweights Infosys, LTI Mindtree, TCS and HCL Tech shares fell more than 5 percent each, while Mphasis, Persistent Systems and Wipro fell nearly 5 percent each.

 Why are IT stocks falling today?

US job growth unexpectedly increased in January and the unemployment rate fell to 4.3 percent. These signs of labor market stability could give the Federal Reserve room to keep interest rates unchanged for some time while policymakers monitor inflation.

However, the sharp increase in payrolls was seen mostly concentrated in the health sector. According to economists quoted by Reuters, job openings and other indicators pointed to a tepid labor market, adding that job growth remained concentrated in the healthcare and social services industries, which accounted for nearly all the rise in employment.

"The only jobs being filled in January are in health care and social assistance, along with some nonresidential specialty trade contractors probably related to AI facilities, all of which do not guarantee the economy's future success," the report quoted Christopher Rupkey, chief economist at FWDBONDS, as saying. "If you are looking for a job ... you are unlikely to find anything to apply for in today's report,” he added.

Wall Street's tech giants fall:

After the release of the report, Wall Street’s tech giants plunged. Software giant Microsoft plunged 2.2 percent and was the biggest loser on the S&P 500, followed by Alphabet which was down 2.4 percent. The S&P 500 software index dropped 2.6 percent, while the overall markets ended flat.

Earlier last week, the IT stocks had seen significant decline amid concerns that artificial intelligence can intensify competition after Anthropic's launch of a legal AI tool. Investors remained concerned that AI was creating more competition for software makers, after Anthropic’s launch of a legal tool for its Claude AI chatbot.

AI developer Anthropic launched plug-ins for its Claude Cowork agent that can automate tasks across legal, sales, marketing and data analysis. The move has triggered worries of an impending AI-fueled disruption of the data and professional services industry, which were once seen as major beneficiaries of the AI era, according to traders and analysts.

Today's fall in IT stocks is a "mix of knee-jerk reaction and concerns over real threat to IT", said Vinit Bolinjkar, head of research at Ventura Securities. "AI automation targets labour-heavy models at top Indian IT firms, slashing billable hours and headcount," Bolinjkar said, adding that the sector could see further downside going ahead.

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