Stocks to buy: Indian IT stocks including Infosys, TCS, HCL Tech, and others recovered on Tuesday, February 17 with the Nifty IT index gaining over 2% in intra-day deals on profit booking. The IT space has been under pressure recently on concerns that artificial intelligence (AI) will disrupt the sector, increasing competitive pressure within the software industry.
The Nifty IT index jumped as much as 2.3% today with all its constituents in the green as well. Infosys and Persistent Systems rose over 2% each while Coforge, Wipro, HCL Tech, TCS, Tech Mahindra, and LTI Mindtree also added between 1-2% each.
This comes after the index had lost 15% in last 1 month and had crashed 21% from its record high of 41,530.3 in December 2025.
Investor sentiment had turned cautious after Anthropic launched a legal-focused AI tool for its Claude chatbot, raising fears that AI-driven solutions could disrupt traditional software and services models by lowering entry barriers and intensifying competition. Furthermore, expectations that the US Federal Reserve could keep interest rates unchanged for longer also weighed on the sector.
IT Sector: What brokerages say
IT stocks are under sharper scrutiny as rapid advances in artificial intelligence raise concerns. Several global and domestic brokerages assess their outlook on the sector. Let’s see what they said and advise investors.
Domestic brokerage house ICICI Direct believes the IT sector is in the midst of a structural transition driven by increasing adoption of AI, workforce rationalization, productivity shifts, and a broader valuation re-adjustment. At the same time, the brokerage noted that the magnitude of the recent correction is close to historical averages, valuations are now below long-term norms, and selective positioning continues to remain constructive.
Looking ahead, ICICI Direct said the focus will be on AI capability building, strength in digital services, and balance sheet resilience. For risk-neutral investors, it suggested a staggered investment approach through IT ETFs over the next few quarters, citing price corrections nearing historical maturity, time correction approaching long-term averages, and valuations turning supportive.
Meanwhile, global brokerage Nomura believes concerns around widespread obsolescence may be exaggerated. It noted that technology adoption cycles tend to be slow due to regulatory, compliance, and operational challenges, and highlighted that IT services companies have historically adapted well to structural shifts.
On the other hand, Citi has struck a cautious tone, flagging that AI-led disruption, combined with lighter domestic institutional investor positioning, could lead to compression in valuation premiums. The brokerage pointed to risks arising from an uncertain demand environment, intensifying competition, and the rapid expansion of global capability centers, which may increasingly bring technology work in-house.
From an investment perspective, ICICI Direct maintained a selectively positive stance, favoring companies with strong AI capabilities, exposure to digital transformation, and healthy deal pipelines.
Preferred names include TCS, LTIMindtree, and Persistent Systems. Persistent Systems was highlighted for its strong growth visibility, capabilities in AI-led services, and valuation comfort relative to historical averages. The brokerage also sees opportunities in digital platform and analytics-led businesses such as apple and LatentView Analytics.
Meanwhile, Citi prefers Infosys and HCLTech. Nomura, on the other hand, likes Infosys in large-caps, Coforge in the mid-cap space and eClerx among small caps.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
