IT stocks shine again! Infosys, TCS jump 6%, HCLTech gains 5%; are signs of a turnaround emerging?

Data show that the IT index has rallied 8.24% over three trading sessions—Friday, Monday, and Tuesday—based on Tuesday’s intraday high of 31,290.95 and Wednesday’s close of 28,906.70.

The market remained closed on Thursday, May 28.

All ten constituents were trading in the green.

Among individual names, Infosys was trading 5.61% higher, while TCS was up over 6%%. Coforge shares were trading 5.67% higher at ₹1,544 apiece on the NSE, and HCL Technologies was up 4.70% at ₹1,251.30.

Tech Mahindra shares were up 2.51% at ₹1,581.90 apiece on the NSE.

Rally in global tech stocks

The Indian IT stocks are taking cues from a strong rebound in US software and technology stocks. Better-than-expected earnings from cloud and software companies have eased concerns that AI will severely disrupt traditional software businesses.

AI fears are moderating

Earlier, investors worried that generative AI could reduce demand for IT services. However, management commentary and analyst reports increasingly suggest that AI is creating new opportunities rather than replacing IT spending altogether. Many financial services firms now believe the pessimism around the sector was excessive.

Value buying after prolonged underperformance

Most frontline IT stocks significantly underperformed the broader market over the past year. As valuations became more attractive relative to their historical averages, investors started accumulating quality names such as Infosys, HCLTech, TCS, and Wipro.

Strong AI-related deal pipeline

Major Indian IT firms continue to announce AI-led transformation projects, cloud migration deals, and digital engineering contracts. Investors are betting that AI adoption will eventually translate into higher deal wins and revenue growth.

For instance, TCS, in May 2026, said that it had partnered with French artificial intelligence firm Mistral to provide frontier grade AI solution, Mistral Forge, for enterprises across the world.

With this, TCS claims to have become the first global system integrator that will leverage Mistral Forge to build custom AI models for enterprises.

As part of this strategic collaboration, TCS will leverage Mistral Forge to build custom AI models for enterprises which will help customers deploy their data and enterprise context to improve decision outcomes.

Similarly, Wipro last week announced its expanded partnership with ServiceNow to implement and scale the impact of agentic AI workflows across core enterprise functions such as IT, HR, procurement, and cybersecurity.

Under this expanded partnership, Wipro will integrate Wipro Intelligence™, its unified suite of AI-powered platforms, solutions, and transformative offerings, with the ServiceNow AI Platform, enabling organizations to streamline the initiation, orchestration, and execution of work across enterprise systems.

By reducing manual coordination and improving visibility into how work progresses across core functions, enterprises can accelerate turnaround times while strengthening accountability and operational governance, the press release added.

Currency tailwinds

A weaker rupee against the US dollar benefits Indian IT companies, as a large portion of their revenue comes from overseas markets. Every depreciation in the rupee can provide support to margins and earnings.

As per a Bloomberg report, the rupee has lost about 10% against the dollar over the past 12 months, the worst performance among Asian currencies. Further, the speculation is growing that it may slump to 100 per dollar.

Early signs of demand stabilisation

Management commentary from recent quarters suggests that client spending, especially in BFSI and certain enterprise segments, is stabilising after a prolonged period of budget cuts and project delays. This has strengthened hopes that the sector may be nearing the end of its earnings slowdown.

To Sum Up

Hence, the rally is being driven by a combination of improving global sentiment, easing AI-related concerns, attractive valuations, continued AI deal momentum, currency support, and expectations that demand conditions are gradually bottoming out.