Infosys shares fall as AI fears weigh on IT sector

Shares of Indian IT firms Infosys and Wipro declined 2-3% on February 12, 2026, after their US ADRs fell over 5% overnight amid investor concerns about AI-driven disruptions.

Infosys’s stock dropped 3.15% to 1,425.60 rupee (US$15.68), and Wipro’s fell 2.5% to 224.14 rupee (US$2.47), with TCS also slipping 3.27%.

The decline followed the unveiling of a new AI tool by US startup Anthropic, aimed at automating legal functions such as contract review and compliance, fueling fears of increased competition and margin pressures.

Analysts warn that AI could reshape the competitive landscape for software and IT services, potentially eroding profitability.

The broader IT sector, including stocks like Coforge, Persistent Systems, LTIMindtree, and HCLTech, is also under pressure, with the Nifty IT index slipping nearly 2% in recent sessions.

Market sentiment remains cautious as investors evaluate AI’s impact on the industry’s future.

🔗 Source: The Economic Times

🧠 Food for thought

Implications, context, and why it matters.

The market’s reaction skips over years of generative AI investment

Investors are uneasy, yet these firms have worked on generative AI for years.
Wipro has trained 180,000 employees in basic generative AI principles, while Tata Consultancy Services (TCS) has trained over 100,000 employees in AI 1.
That groundwork is feeding sales, with TCS citing more than 250 generative AI opportunities in its pipeline and Infosys saying it is working on over 90 generative AI programs 1.
Wipro has also shipped complex tools, including a chatbot for a U.S.-based health insurer that former Wipro CEO Thierry Delaporte said cut operating costs by 30% to 40% 1.

AI is pushing a move from labor arbitrage to IP-led and platform-led services

The stock drop tracks a real risk to the traditional IT services model that depends on lower-cost staff for business-process work such as finance and accounting, a segment that made up more than 20% of U.S. business process outsourcing (BPO) market revenue in 2022 2.
AI can automate parts of that work, which puts pressure on margins as tools take on tasks like contract review and compliance.
Firms are steering away from selling hours toward proprietary platforms like Infosys Cortex, which Infosys is integrating with Amazon Web Services (AWS) generative AI capabilities, including Amazon Bedrock, to improve contact-center operations 3.
Wipro also sells AI strategy advisory services priced at £120 to £1,745 per unit a day on the UK Digital Marketplace 4.