Infosys, Wipro and other IT stocks slide up to 6% as AI fears continue to hammer tech pack

Shares of IT majors Infosys and Wipro fell up to 6% on Friday, extending their slide as concerns over AI-led disruption weighed on sentiment.

The weakness followed a sharp overnight drop of up to 10% in ADRs of Indian IT companies after Anthropic unveiled a new AI product capable of automating a wide range of professional tasks. The announcement revived fears that advanced automation could pressure margins and weaken the competitive positioning of traditional IT services firms.

On the domestic bourses, Infosys declined 5.51% to Rs 1,310, while Wipro fell 3.37% to Rs 211.70. The IT index marked its third straight session of losses, after sliding 5.5% on Thursday.


The weakness is also weighing on the broader IT pack, with stocks such as Coforge, Persistent Systems, LTIMindtree and HCLTech facing selling pressure.

Anthropic, the company behind the Claude chatbot, said the product is capable of automating several legal functions, including contract reviews, non disclosure agreement triage, compliance workflows, legal brief preparation and standardised responses.

This development has added to the already bearish sentiment surrounding software stocks, as investors increasingly worry about intensifying competition and margin pressure stemming from widespread AI adoption.

Also read: Rs 6 lakh crore wipeout in 8 days! Is AI rewriting the rules for $250 billion Indian IT industry?

Why are investors rattled?
At the heart of the market reaction is a growing concern that AI could fundamentally reshape the competitive landscape for software and IT services companies, eroding both profitability and market position.

“The fear with AI is that there's more competition, more pricing pressure, and that their competitive moats have gotten shallower, meaning they could be easier to replace with AI,” said Thomas Shipp, head of equity research at LPL Financial, which has $2.4 trillion in brokerage and advisory assets. “The range of outcomes for their growth has gotten wider, which means it's harder to assign fair valuations or see what looks cheap.”

Industries once considered relatively safe from AI disruption, including legal services, data analytics and customer support, are now firmly in the crosshairs. If AI can automate these functions, the massive IT services industry built around delivering them could face existential challenges.

Also read: Rs 2.5 lakh crore pipeline, but listings muted in 2026. Is India's mega IPO boom stalling?

Last week, international brokerage Jefferies was among the first to label the market reaction a “SaaSpocalypse”, noting a rapid shift in sentiment “from ‘AI helps these companies’ to ‘AI replaces these companies’.” Jeffrey Favuzza from Jefferies’ equity trading desk described the mood as outright panic. “Trading is very much ‘get me out’ style selling,” he said, according to Bloomberg.

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