NewPARA The Indian IT services index jumped 12% on Monday, outpacing the MSCI India index by 7.5 points. TCS shares, part of the index, mirrored the rally, trading near ₹3,200 per share after a 5% intraday swing.
NewPARA Ed Yardeni, President of Yardeni Research, said the volatility in AI-linked stocks is a normal phase of market revaluation, not a signal of a cycle end. He added that investors are reassessing the pace and returns of AI infrastructure spending.
NewPARA Yardeni noted that Indian software services are increasingly viewed as part of a wider IT ecosystem rather than a replacement for traditional services. He said this shift could sustain upside momentum for firms like TCS, Infosys and Wipro.
NewPARA Across the Atlantic, the US technology earnings season is expected to deliver a 25% year‑on‑year growth in revenue, according to analyst consensus. Yardeni believes the broader tech sector will remain in a bull market as earnings support the rally.
NewPARA Looking ahead, Yardeni expects the AI theme to continue rotating between optimism and caution. He recommends staying focused on fundamentals, noting that bond markets are already discriminating between high‑quality and high‑leverage AI plays.
NewPARA For Indian IT investors, the takeaway is clear: AI is a catalyst, not a substitute. The sector’s recent 12% lift underscores that momentum, and the next earnings cycle may confirm the resilience of firms like TCS.