Infosys (INFY) Stock; Declines Almost 6% as AI Fears Ripple Across IT Sector

TLDRs ;

• Infosys shares drop nearly 6% amid investor concerns that AI could disrupt IT services margins.
• Nifty IT index falls nearly 2% as sector-wide stocks respond to AI-driven competition concerns.
• Wipro and TCS have trained hundreds of thousands in AI, potentially mitigating immediate disruption risks.
• Indian IT firms move from labor-based models to AI-powered platforms to safeguard future margins.

Shares of Indian IT giants Infosys and Wipro tumbled on February 12, 2026, as the market reacted to fears that rapid advances in AI could challenge traditional business models. Infosys fell almost 6% to 1,425.60 rupee (US$15.68), while Wipro dropped 2.5% to 224.14 rupee (US$2.47). Tata Consultancy Services (TCS) also saw a decline of 3.27%.

The sell-off followed the launch of a new AI solution by U.S.-based startup Anthropic, which aims to automate legal functions like contract review and compliance. Analysts warn that such tools could erode profit margins for IT service providers, which have historically relied on lower-cost labor and human-driven workflows.

Broader IT Sector Feels Pressure

The ripple effect of AI fears extends beyond Infosys and Wipro. Stocks of Coforge, Persistent Systems, LTIMindtree, and HCLTech have all faced pressure in recent sessions, with the Nifty IT index sliding nearly 2%. Investors are evaluating how AI might alter the competitive landscape, from outsourcing-heavy business processes to higher-value platform-based services.

Infosys Limited, INFY

Market sentiment has been cautious as analysts weigh the balance between AI adoption and disruption. While these firms have invested heavily in generative AI over the past years, the fear that external AI innovations could leapfrog existing capabilities is fueling short-term volatility.

Years of AI Investment May Cushion Impact

Despite recent declines, Indian IT firms are far from unprepared. Wipro has trained 180,000 employees in generative AI principles, and TCS has upskilled over 100,000 staff members. Infosys reports that it is actively developing more than 90 generative AI programs, while TCS has over 250 such projects in its pipeline.

Complex implementations are already in place. Wipro, for instance, deployed a chatbot for a U.S.-based health insurer that reportedly reduced operating costs by 30% to 40%, demonstrating that AI can also be a profit-enhancing tool rather than purely a threat.

Shift to Platform-Led Services

The stock sell-off underscores a structural shift in IT services. Traditionally reliant on labor arbitrage, companies are now pivoting toward IP-led and platform-driven offerings. Infosys is integrating its Cortex platform with AWS generative AI tools, including Amazon Bedrock, to enhance contact-center operations.

Wipro has also introduced AI strategy advisory services priced between £120 and £1,745 per unit per day on the UK Digital Marketplace.

This pivot aims to reduce reliance on volume-driven outsourcing and protect profitability as automation takes on tasks historically performed by human staff. Analysts note that while AI could pressure traditional models, these platforms may position companies for long-term growth in a rapidly evolving tech landscape.

Bottom Line:

Investor anxiety over AI-driven disruptions has pushed Infosys shares down almost 6%, while the broader IT sector is under pressure.

However, years of generative AI investment and a shift toward platform-based services may cushion firms against long-term risks, suggesting that today’s market reaction could be more about short-term sentiment than fundamental weakness.

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