Shares of Infosys and Wipro are down 2-3% as investors are still plagued by the Anthropic shock
Infosys, Wipro Shares Slide Up to 3% as ADRs Tumble on AI Disruption Fears
Mumbai: Shares of IT majors Infosys and Wipro fell 2–3% in Thursday’s trading session after their American Depository Receipts (ADRs) dropped by as much as 5.2% overnight on Wall Street, amid rising concerns over artificial intelligence-led disruption.
Infosys declined 3.15% to ₹1,425.60, while Wipro slipped 2.5% to ₹224.14. Shares of Tata Consultancy Services (TCS) also fell 3.27% to ₹2,814.70.
The weakness is expected to weigh on the broader IT pack, with stocks such as Coforge, Persistent Systems, LTIMindtree and HCLTech likely to witness heightened activity. In the previous session, the Nifty IT index had already slipped nearly 2%, reflecting cautious investor sentiment.
AI Tool Sparks Fresh Worries
The trigger for the selloff appears to be fresh concerns over AI-driven disruption following an announcement by US artificial intelligence startup Anthropic. The company, known for its Claude chatbot, recently unveiled a new AI tool tailored for corporate legal teams.
Anthropic said the product can automate a range of legal functions, including contract reviews, non-disclosure agreement triage, compliance workflows, legal brief preparation and standardised responses. The development has intensified fears that AI could encroach upon services traditionally delivered by IT and software firms.
Reflecting the nervousness, Wipro’s ADRs fell more than 4% to close at $2.39, while Infosys ADRs declined 5.12% to $15.76.
Why Are Investors Rattled?
At the heart of the market reaction is concern that AI could fundamentally reshape the competitive landscape for software and IT services companies, putting pressure on margins and weakening long-established competitive advantages.
“The fear with AI is that there’s more competition, more pricing pressure, and that their competitive moats have gotten shallower, meaning they could be easier to replace with AI,” said Thomas Shipp, head of equity research at LPL Financial, which oversees $2.4 trillion in brokerage and advisory assets.
“The range of outcomes for their growth has gotten wider, which means it’s harder to assign fair valuations or see what looks cheap,” he added.
Industries once considered relatively insulated from automation — including legal services, data analytics and customer support — are now seen as increasingly vulnerable to AI-led transformation. If AI tools can automate such functions at scale, the global IT services industry built around delivering them could face structural challenges.
Last week, international brokerage Jefferies described the sharp shift in market sentiment as a “SaaSpocalypse,” noting that investor thinking has rapidly moved “from ‘AI helps these companies’ to ‘AI replaces these companies’.”
Jeffrey Favuzza from Jefferies’ equity trading desk described the current mood as panic-driven. “Trading is very much ‘get me out’ style selling,” he said, according to Bloomberg.
