India’s information technology sector witnessed renewed investor confidence after Infosys announced a strategic collaboration with Anthropic to strengthen enterprise artificial intelligence (AI) solutions. The announcement triggered a strong rally in IT stocks, helping the Nifty IT index climb more than 2 percent during early trading on February 17, 2026. Market experts believe the partnership signals the sector’s proactive shift toward AI-driven growth rather than facing disruption risks.
Infosys Leads IT Rally Amid Strategic AI Collaboration
Infosys shares rose nearly 3 percent after confirming its alliance with Anthropic. The collaboration focuses on integrating Anthropic’s advanced Claude models into Infosys’ Topaz AI platform to deliver industry-focused enterprise solutions. The companies also plan to establish a dedicated AI Center of Excellence aimed at building AI agents tailored to sectors such as financial services, telecommunications, manufacturing, and software development.
The rally was not limited to Infosys. Major IT firms including Coforge, HCL Technologies, and Persistent Systems recorded gains of around 2 percent. Other sector leaders such as Tata Consultancy Services, Wipro, Tech Mahindra, and LTI Mindtree also traded higher, reflecting broader market optimism.
AI Concerns Had Triggered Recent Volatility
The IT sector recently experienced sharp corrections due to growing fears that artificial intelligence tools could reduce demand for traditional software services. The concerns intensified following Anthropic’s earlier launch of legal-focused AI capabilities, which sparked speculation about rising competition in enterprise software development.
As a result, the Nifty IT index had declined over 8 percent last week, marking its weakest performance in nearly a year. Analysts attributed the downturn to multiple factors, including global technology sector weakness, currency fluctuations, and foreign investor outflows. Economic developments in the United States also influenced sentiment, with stronger job growth raising expectations that the Federal Reserve may maintain elevated interest rates for a longer period.
Brokerages See Long-Term Value in IT Stocks
Global brokerage Nomura stated that IT stock valuations have entered a value zone after the recent correction. The firm believes AI disruption fears may be exaggerated and fail to capture the evolving role of IT service providers.
Nomura outlined three potential scenarios for the sector’s future. In a pessimistic case involving structural revenue decline, growth could slow significantly. However, if companies successfully transition toward data-driven and AI-based services, revenue growth could stabilize. The most optimistic scenario suggests IT firms may become AI orchestrators, offering outcome-based service models that could enhance profitability and valuation multiples. Nomura identified Infosys, Cognizant, Coforge, and eClerx among its preferred sector picks.
Experts Highlight AI as Growth Opportunity
Research teams from JPMorgan emphasised that AI is more likely to create new service opportunities rather than eliminate the need for IT vendors. Analysts compared IT firms to infrastructure providers that enable enterprise technology adoption and integration across industries.
Similarly, analysts at Macquarie Group noted that falling technology costs historically expand demand rather than reduce it. Past concerns about automation and low-code platforms eventually helped IT service firms expand their business offerings instead of shrinking them.
During discussions reported by CNBC-TV18, market experts suggested that AI adoption could encourage IT firms to restructure pricing strategies toward outcome-based delivery models. This transition may improve operational efficiency and strengthen revenue streams over time.
Market Outlook for Indian IT Sector
Analysts believe improving global demand trends and potential earnings guidance in the upcoming financial cycle could trigger a valuation re-rating for IT stocks. While some experts caution about short-term downside risks in large-cap IT companies, the overall sentiment remains constructive due to strong digital transformation demand across industries.
According to reports cited by Reuters, employment data and broader economic indicators continue to influence investor expectations globally. However, Indian IT firms remain well-positioned to benefit from enterprise digitalisation and AI-driven transformation.
Overall, the Infosys-Anthropic partnership has reinforced confidence that Indian IT companies are evolving alongside emerging technologies rather than being replaced by them. As businesses worldwide accelerate AI adoption, industry leaders appear focused on adapting business models to maintain competitiveness and drive long-term growth.
Pingback: IDFC First Bank Share Price Target 2026–2030: Buy or Avoid?