By Admin 
Share Market: Yesterday i.e. last Thursday, IT stocks fell by more than 5 percent. Due to this, the condition of Nifty IT index was bad. It came close to its lowest level in almost 10 months.
In fact, the possibility of damage to companies due to Artificial Intelligence (AI) and the diminishing expectations of an early rate cut by the US Federal Reserve after better than expected employment figures in America affected the market sentiment. The 10-stock Nifty IT index emerged as the worst performing sector in Thursday’s trading session and the total market value of IT companies declined by Rs 1.3 lakh crore.
Why did IT stocks fall?
This huge fall in technology stocks had the biggest impact on companies like Tech Mahindra, Infosys and Tata Consultancy Services (TCS). Their shares fell by about 6 percent. During this period, BSE Midcap Select Index recorded a decline of 0.48 percent and Smallcap Select Index recorded a decline of 0.28 percent. However, the maximum decline of 5.40 percent among sectoral indices was seen in Nifty IT index.
These days, American AI company Anthropic and its new tool Cloud Cowork is becoming a new headache for investors. It is reported that this AI tool can do tasks like coding, marketing, legal and accounting on its own, which is usually done by IT companies. Due to this, investors are worried that instead of helping IT companies, it could replace them. The issue may come up regarding his job.
What do experts say?
Dr. VK Vijayakumar of Geojit Investments said, “Tech stocks suffering from anthropic shock are not expected to recover soon.” Some experts believe that companies may lose up to 40 percent of their revenue because AI will start doing the work that humans used to do earlier. According to government reports, January employment data in the US showed 130,000 new jobs and 4.3 percent unemployment, so the Federal Reserve may not cut interest rates anytime soon, which is bad news for tech stocks.
Now the big question is whether IT companies will be able to survive in front of AI? “There is a fear of increased competition with AI, more pricing pressure, and their competitive moots have weakened, which means they may be easier to replace with AI,” says Thomas Shipp of LPL Financial.
Motilal Oswal warned that AI will make old software and testing less necessary. However, they suggest keeping an eye on AI partnerships over the next 3-6 months, which could lead to new AI service deals by mid-2026.
Disclaimer: (The information provided here is being given for information only. It is important to note here that investing in the market is subject to market risks. Always consult an expert before investing money as an investor. ABPLive.com It is never advised for anyone to invest any money here.)
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