TCS, Infosys, Wipro, HCL Tech, Mphasis, Coforge shares rallied up to 5% today; here's why

The reverse AI trade has gathered pace following a higher-than-expected US inflation print, which raised doubts over AI-related commitments by technology giants amid rising bets on Fed rate hikes. Earlier, IT spending were shifting toward Al infrastructure, tokens, Al-enabled software, cybersecurity, data readiness and modernization, while traditional maintenance, support and other effort-based services were facing increasing pricing pressure.

With interest rates rising globally and US Treasury bond yields still above 5 per cent, questions have emerged over mounting AI debt. In overnight trade, Meta Platforms dropped 7 per cent, despite beating revenue expectations and issuing upbeat guidance, as investors focused on the scale of its AI-related spending. Advanced Micro Devices fell more than 8 per cent, while Micron Technology and Nvidia dropped 6 per cent and 4 per cent, respectively, Nandish Shah - Deputy Vice President at HDFC Securities said.

He noted that other Asian markets were also trading mixed as investors reduced exposure to technology majors on doubts over AI spending and moved toward safer assets such as Treasuries and the yen.