Indian IT stocks slid about 5% on February 12, 2026, as investors factored in AI-driven disruption fears despite a stronger US jobs report for January, with heavyweights like TCS, Tech Mahindra, Mphasis, LTI Mindtree, and Persistent Systems down more than 4% and HCL Technologies and Wipro each off over 3%.

The Nifty IT index weakened alongside broader mood, with notable sector weakness contributing to a broader pullback in Indian equities.

Brent crude drifted lower to around 69.21 per barrel, while domestic indices closed the prior session near the mid- to upper-84,000s on the Sensex and around 25,954 on the Nifty, underscoring a cautious risk-off environment.

Analysts cautioned that AI adoption in enterprises may be gradual and uneven, with some envisioning step changes from advanced tools while others warned against expecting immediate mass displacement of IT services.

The Budget includes a tax holiday for data centers supporting AI workloads and cloud adoption through FY47, intended to spur demand from global cloud players and accelerate localization efforts.

January payroll gains were concentrated in healthcare and social services, signaling a tepid broader labor market and suggesting mixed implications for tech spending.

Direct tax collections for the current fiscal year rose about 9.4% to Rs 19.43 lakh crore, with corporate tax up roughly 14.5% and non-corporate taxes up about 5.9%, signaling domestic macro resilience amid global volatility.

New AI tools and plugins from Anthropic renewed fears of disruption, with Claude’s upgraded model delivering longer outputs and better coding and finance performance, intensifying concerns for traditional software and services firms.

Global markets showed a mixed tone with European and US futures modestly higher while Asia-Pacific moved modestly; stronger US jobs data tempered rate-cut hopes and contributed to a cautious risk environment.

Analysts framed the sell-off as a valuation correction driven by broader rate expectations and AI-disruption concerns, rather than a fundamental deterioration in business prospects.

Several analysts argue that the sell-off reflects anticipated headwinds to growth in large-cap IT firms over the next 3–4 years, with only muted mid-single-digit expansion expected.

AI-native platforms and faster automation are seen as potential reducers of demand for traditional outsourcing work, adding pressure on IT services stocks.